Which of the Following Statements Is Incorrect

question 60

Multiple Choice

Which of the following statements is incorrect?

• A) In general, money today is worth more than money in one year.
• B) We define the risk-free interest rate, r_f, for a given period as the interest rate at which money can be borrowed or lent without risk over that period.
• C) We refer to (1 - r_f) as the interest rate factor for risk-free cash flows.
• D) For most financial decisions, costs and benefits occur at different points in time.

---

Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, essentially representing the ownership equity held by stockholders.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a particular moment in time, showing assets, liabilities, and shareholders' equity.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services provided.

Ending Equity

The value of ownership in a company at the end of an accounting period, calculated as assets minus liabilities.