Which of the Following Statements Is FALSE

question 49

Multiple Choice

Which of the following statements is FALSE?

• A)When a firm faces financial distress,shareholders have an incentive not to invest and to withdraw money from the firm if possible.
• B)Because top managers often hold shares in the firm and are hired and retained with the approval of the board of directors,which itself is elected by shareholders,managers will generally make decisions that increase the value of the firm's equity.
• C)An over-investment problem occurs when shareholders have an incentive to invest in risky positive-NPV projects.
• D)A negative-NPV project destroys value for the firm overall.

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Definitions:

Stability Level

The degree to which a system is resistant to, or able to absorb, changes and disturbances, maintaining its original state.

Modernization Level

a measure of how advanced a society is in terms of technological development, social structure, and economic practices.

Crude Death Rate

A demographic measure that quantifies the number of deaths per thousand individuals in a population per year.

Mortality Rate

A measure of the number of deaths in a particular population, scaled to the size of that population, per unit of time.