Which of the Following Statements Is False

question 63

Multiple Choice

Which of the following statements is false?

• A) For capital budgeting purposes, the project's financing is the incremental financing that results if the firm takes on the project.
• B) Projects with safer cash flows can support more debt before they increase the risk of financial distress for the firm.
• C) If the positive free cash flow from a project will increase the firm's cash holdings, then this growth in cash is equivalent to a reduction in the firm's leverage.
• D) The incremental financing of a project corresponds directly to the financing that is directly tied to the project.

---

Definitions:

Production Process

The series of steps or actions taken to transform raw materials into finalized products.

Regulatory Environment

The collection of laws, regulations, and guidelines that govern how businesses operate, impacting various sectors differently.

Operating Segment

A component of a business that engages in business activities which may earn revenues and incur expenses, and for which separate financial information is available.

Operating Segments

Parts of a business for which financial information is available and evaluated by the chief decision maker for purposes of resource allocation and performance assessment.