Which of the Following Statements Is False

question 51

Multiple Choice

Which of the following statements is false?

• A) Traditionally, managers have used the equivalent annual benefit method to choose between projects of different lives.
• B) The equivalent annual benefit method ignores the value of any real options because it assumes that the projects will always be replaced at their original terms.
• C) If the future costs (or benefits) are certain with mutually exclusive projects, then we must use a real options approach to determine the correct decision.
• D) The equivalent annual benefit method accounts for the difference in project lengths by calculating the constant payment over the life of the project that is equivalent to receiving the NPV today and then selecting the project with the higher equivalent annual benefit.

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Definitions:

African Americans

Describes Americans of African descent with a history and culture that have significantly shaped the social, economic, and political fabric of the United States.

1970s

The 1970s refers to the decade marked by significant cultural, political, and technological changes worldwide, including the end of the Vietnam War, the Watergate scandal, and the rise of disco.

Vietnam War

A prolonged conflict (1955-1975) between North Vietnam, supported by its communist allies, and South Vietnam, supported by the United States and other anti-communist countries.

Nixon

Richard Nixon, the 37th President of the United States (1969-1974), known for ending American involvement in Vietnam but whose presidency ended in resignation due to the Watergate scandal.