Which of the Following Statements Is FALSE

question 14

Multiple Choice

Which of the following statements is FALSE?

• A) Chief among the costs associated with size is that larger firms are more difficult to manage.
• B) For most investors an investment in the stock market is a zero-NPV investment.
• C) Tax savings from operating profits are by far the most common justification that bidders give for the premium they pay for a target.
• D) An acquirer might be able to add economic value, as a result of an acquisition, that an individual investor cannot add.

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Definitions:

Debenture

Unsecured debt, usually with a maturity of ten years or more.

Line Of Credit

An arrangement between a financial institution and a customer that establishes a maximum loan balance that the borrower can access.

Carrying Costs

The cumulative expenses associated with maintaining inventory, which encompass storage fees, insurance premiums, taxes, the decrease in value over time, and the costs related to missed opportunities.

Shortage Costs

Costs incurred when demand exceeds supply, leading to inventory shortages, potentially including lost sales, backorder costs, and customer dissatisfaction.