Which of the Following Statements Is FALSE

question 47

Multiple Choice

Which of the following statements is FALSE?

• A)If we can identify a comparison firm whose assets have the same risk as the project being evaluated,and if the comparison firm is levered,then we can use its equity cost of capital as the cost of capital for the project.
• B)We can calculate the cost of capital of the firm's assets by computing the weighted average of the firm's equity and debt cost of capital,which we refer to as the firm's weighted average cost of capital.
• C)The portfolio of a firm's equity and debt replicates the returns we would earn if the firm were unlevered.
• D)When evaluating any potential investment project,we must use a discount rate that is appropriate given the risk of the project's free cash flow.

Understand different inventory costing methods (FIFO, LIFO, Average cost, and Specific Identification) and their impact on financial statements.

Calculate ending inventory and cost of goods sold (COGS) using different inventory costing methods.

Understand the effects of inventory costing choices on gross profit.

Distinguish between the perpetual and periodic inventory systems and their impact on inventory valuation.

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Definitions:

\(a _ { 6 }\)

Represents the sixth term in a sequence or series, typically found using a formula for the nth term.

\(34\)

An integer and natural number following 33 and preceding 35.

\(k ^ { 3 }\)

Represents the cube of a variable \(k\), equivalent to multiplying \(k\) by itself twice (\(k*k*k\)).