Which of the Following Statements Is False

question 11

Multiple Choice

Which of the following statements is false?

• A) The terminal of continuation value of the project represents the market value (as of the last forecast period) of the free cash flow from the project at all future dates.
• B) The incremental effect of a project on the firm's available cash is the project's free cash flow.
• C) (1 - τ_c) × Depreciation is called the depreciation tax shield.
• D) To evaluate a capital budgeting decision, we must determine its consequences for the firm's available cash.

Understand data breach risks and their impact on businesses and employees.

Grasp the fundamentals of AI, ML, NLP, and IoT and their practical applications.

Identify and apply e-commerce transactions and security compliance in business.

Understand the deferral method and restrictions on contributions in NFP accounting.

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Definitions:

Acid-test Ratio

A stringent indicator of a company's short-term liquidity, calculated by dividing cash, marketable securities, and net receivables by current liabilities.

Receivables Turnover

A financial metric indicating how quickly a company collects on outstanding accounts receivable in a given period, calculated as net credit sales divided by average accounts receivable.

Debt Ratio

A financial ratio that compares the amount of a company's debt to its total assets, indicating the proportion of a company's assets that are financed through debt.

Cash Flow from Operations

The amount of cash a company generates through its regular business operations over a specific period.