Which of the Following Statements Is False

question 7

Multiple Choice

Which of the following statements is false?

• A) Depreciation is not a cash expense paid by the firm.
• B) Net Working Capital = Cash + Inventory + Payables - Receivables.
• C) Since 1997, companies can "carry back" losses for two years and "carry forward" losses for 20 years.
• D) Earnings do not represent real profits.

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Definitions:

Scale of Production

Refers to the level at which production activities are aggregated or expanded, affecting the unit costs and capability of the production process.

Lower

To decrease in position, value, or condition.

Average Total Cost

The total cost of production divided by the number of units produced, encompassing both fixed and variable costs.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and free entry and exit, leading to price taker behavior.