Which of the Following Statements Is FALSE

question 66

Multiple Choice

Which of the following statements is FALSE?

• A)The simplest method used to calculate depreciation is the straight-line method.
• B)A sunk cost is any unrecoverable cost for which the firm is already liable.
• C)Unlevered Net Income = EBIT × τ_c.
• D)The decision to continue or abandon should be based only on the incremental costs and benefits of the project going forward.

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Definitions:

Unit Sales

The total number of individual items or units that a company sells.

Margin of Safety

The difference between actual sales and sales at the break-even point, indicating the risk level of not covering fixed costs.

Break-Even Sales

The sum of money needed to offset all constant and fluctuating expenses, achieving a financial break-even point with no gains or deficits.

Current Sales

The total revenue generated from sales activities in the most recent accounting period.