Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) We begin the capital budgeting process by determining the incremental earnings of a project.
• B) The marginal corporate tax rate is the tax rate the firm will pay on an incremental dollar of pre-tax income.
• C) Investments in plant, property, and equipment are directly listed as expenses when calculating earnings.
• D) The opportunity cost of using a resource is the value it could have provided in its best alternative use.

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Definitions:

Liabilities

Sums of money or other financial obligations that a company is required to pay in the future to creditors, lenders, or suppliers.

Assets

Economic resources owned or controlled by a business, expected to provide future benefits.

Total Assets

The sum of all assets owned by a business, including both current and non-current assets.

New Building

This term refers to the accounting classification of a recently constructed building as a fixed asset, which will be subject to depreciation over its useful life.