Which of the Following Statements Is False

question 51

Multiple Choice

Which of the following statements is false?

• A) Traditionally, managers have used the equivalent annual benefit method to choose between projects of different lives.
• B) The equivalent annual benefit method ignores the value of any real options because it assumes that the projects will always be replaced at their original terms.
• C) If the future costs (or benefits) are certain with mutually exclusive projects, then we must use a real options approach to determine the correct decision.
• D) The equivalent annual benefit method accounts for the difference in project lengths by calculating the constant payment over the life of the project that is equivalent to receiving the NPV today and then selecting the project with the higher equivalent annual benefit.

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Definitions:

Attention-Deficit/Hyperactivity Disorder

A neurological disorder characterized by a pattern of inattention and/or hyperactivity-impulsivity that interferes with functioning or development.

Cognitive Abilities

The mental capacities that involve the ability to reason, plan, solve problems, think abstractly, and comprehend complex ideas.

Vigilance

The act or state of keeping careful watch for possible danger or difficulties.

Electrically Charged

Having an excess or deficiency of electrons, resulting in the ability to exert an electromagnetic force on other charged objects.