Which of the Following Statements Is False

question 33

Multiple Choice

Which of the following statements is false?

• A) The firm deducts a fraction of the investments in plant, property, and equipment each year as depreciation.
• B) If securities are fairly priced, the net present value of a fixed set of cash flows is independent of how those cash flows are financed.
• C) Sunk cost fallacy is a term used to describe the tendency of people to ignore sunk costs in capital budgeting analysis.
• D) A good rule to remember is that if our decision does not affect a cash flow then the cash flow should not affect our decision.

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Three-Step Writing Process

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