Which of the Following Statements Is False

question 18

Multiple Choice

Which of the following statements is false?

• A) Most projects will require the firm to invest in net working capital.
• B) The main components of net working capital are cash, inventory, receivables, and property, plant and equipment.
• C) ΔNWC_t = NWC_t - NWC_{t - 1.}
• D) In the final year of a project, the firm ultimately recovers the investment in net working capital.

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Definitions:

Variable Costing

An accounting method that only assigns variable costs to inventory, treating fixed costs as period expenses.

Manufacturing Overhead Costs

Indirect costs associated with manufacturing, which are not directly attributable to specific units produced, such as maintenance, utilities, and salaries of indirect labor.

Net Operating Income

Earnings from a company's core business operations, excluding deductions for interest and taxes.

Gross Margin

represents the difference between revenue and cost of goods sold divided by revenue, showcasing the percentage of sales that exceeds the cost of goods sold.