Which of the Following Statements Is False

question 45

Multiple Choice

Which of the following statements is false?

• A) Project externalities are direct effects of the project that may increase of decrease the profits of other business activities of the firm.
• B) Incremental earnings are the amount by which the firm's earnings are expected to change as a result of the investment decision.
• C) The average selling price of a product and its cost of production will generally change over time.
• D) Any money that has already been spent is a sunk cost and is therefore irrelevant in the capital budgeting process.

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Definitions:

Life Estate

A property interest that lasts for the lifetime of a specific individual, after which the property passes to another designated party.

Finder

An individual or entity that identifies and facilitates a business opportunity or the recovery of lost or unclaimed assets for a fee.

Proper Owner

The legitimate or rightful holder of property, who has legal title or claim to it.

Mortgage Transaction

A financial agreement where a borrower receives funds secured by the value of real property, which is to be repaid with interest over time.