Which of the Following Statements Is FALSE

question 43

Multiple Choice

Which of the following statements is FALSE?

• A)The investor's opportunity cost of capital is the best available expected return offered in the market on an investment of comparable risk and term of the cash flows being discounted.
• B)Interest rates we observe in the market will vary based on quoting conventions,the term of investment,and risk.
• C)The opportunity cost of capital is the return the investor forgoes when the investor takes on a new investment.
• D)For a risk-free project,the opportunity cost of capital will typically be greater than the interest rate of U.S.Treasury securities with a similar term.

---

Definitions:

Variable Manufacturing Cost

Costs in manufacturing that vary with the level of output, including costs such as raw materials and direct labor.

Unit Product Cost

The total cost (direct materials, direct labor, and manufacturing overhead) associated with producing one unit of a product.

Reduced Price

The selling price of a product or service after it has been discounted from the original or standard price.

Annual Financial Advantage

Annual Financial Advantage refers to the financial benefit realized on an annual basis from a particular investment or decision.