Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)The relative proportions of debt,equity,and other securities that a firm has outstanding constitute its capital structure.
• B)The most common choices are financing through equity alone and financing through a combination of debt and equity.
• C)The project's NPV represents the value to the new investors of the firm created by the project.
• D)When corporations raise funds from outside investors,they must choose which type of security to issue.

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Definitions:

Variable Cost

Costs that change in proportion to the level of activity or volume of goods produced in a business.

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.

Total Variable Cost

The sum of all variable costs associated with the production of a given level of output.

Total Fixed Cost

The sum of all costs required to produce any product or service that does not change with the level of output.