Which of the Following Statements Is FALSE

question 80

Multiple Choice

Which of the following statements is FALSE?

• A)Sales will ultimately decline as the product nears obsolescence or faces increased competition.
• B)Managers sometimes continue to invest in a project that has a negative NPV because they have already invested a large amount in the project and feel that by not continuing it,the prior investment will wasted.
• C)With straight-line depreciation the asset's cost is divided equally over its life.
• D)A projects unlevered net income is equal to its incremental revenues less costs and depreciation,evaluated on an pre-tax basis.

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Definitions:

Dividends in Arrears

Unpaid dividends of cumulative preferred stock for the designated period.

Accumulated Other Comprehensive Income

A component of shareholders' equity that includes unrealized gains and losses on certain types of investments, not recognized in the income statement.

Stock Dividends Distributable

A liability account that records the amount of dividends declared by the company to be paid out in the form of additional shares.