Which of the Following Statements Is False

question 72

Multiple Choice

Which of the following statements is false?

• A) Because value is lost when a resource is used by another project, we should include the opportunity cost as an incremental cost of the project.
• B) Sunk costs are incremental with respect to the current decision regarding the project and should be included in its analysis.
• C) Overhead expenses are associated with activities that are not directly attributable to a single business activity but instead affect many different areas of the corporation.
• D) When computing the incremental earnings of an investment decision, we should include all changes between the firm's earnings with the project versus without the project.

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Definitions:

Lump Sum Payment

A one-time payment made specifically rather than multiple smaller payments over time.

Obligations

Duties or responsibilities imposed legally or socially, requiring a person or entity to act or refrain from acting in a certain manner.

Compounded Monthly

Interest on a loan or investment calculated each month and added to the balance, so future interest accrues on a larger total.

Savings

Money set aside for future use rather than spending immediately.