Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A) The APV approach explicitly values the market imperfections and therefore allows managers to measure their contribution to value.
• B) We need to know the debt level to compute the APV, but with a constant debt-equity ratio we need to know the project's value to compute the debt level.
• C) The WACC method is more complicated than the APV method because we must compute two separate valuations: the unlevered project and the interest tax shield.
• D) Implementing the APV approach with a constant debt-equity ratio requires solving for the project's debt and value simultaneously.

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Definitions:

Bran

The outer layer of cereal grains removed during the milling process, rich in fiber and nutrients.

Germ

A microorganism, especially one that causes disease; commonly used to refer to pathogens or microbes.

Endosperm

The part of a seed that acts as a food store for the developing plant embryo, usually containing starch with protein and other nutrients.

Essential Nutrients

Nutrients necessary for normal body functioning that must be obtained from the diet; includes vitamins, minerals, amino acids, and fatty acids.