Which of the Following Statements Is False

question 55

Multiple Choice

Which of the following statements is false?

• A) The simplest method used to calculate depreciation is the straight-line method.
• B) A sunk cost is any unrecoverable cost for which the firm is already liable.
• C) Unlevered Net Income = EBIT × τ_c.
• D) The decision to continue or abandon a project should be based only on the incremental costs and benefits of the project going forward.

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Definitions:

Upper Cash Limit

The maximum cash balance a company sets to hold on hand, beyond which excess funds are usually invested in short-term securities.

Lockbox Services

Banking services that process payments for companies by collecting and depositing checks into their accounts.

NPV

Net Present Value is a financial measure that computes the variance between the present value of cash inflows and outflows within a specific timeframe.

T-bills Yield

The return on investment for U.S. Treasury bills, being a measure of the interest income earned from holding these government securities.