Which of the Following Statements Is False

question 48

Multiple Choice

Which of the following statements is false?

• A) When evaluating a capital budgeting decision, the correct tax rate to use is the firm's average corporate tax rate.
• B) To determine the capital budget, firms analyze alternative projects and decide which ones to accept through a process called capital budgeting.
• C) A new product typically has lower sales initially, as customers gradually become aware of the product.
• D) Sunk costs have been or will be paid regardless of the decision on whether or not to proceed with the project.

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Definitions:

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