Which of the Following Statements Regarding Value Additivity Is FALSE

question 53

Multiple Choice

Which of the following statements regarding value additivity is FALSE?

• A)The value of a portfolio is equal to the sum of the values of its parts.
• B)The price or value of the entire firm is equal to the sum of the values of all projects and investments within the firm.
• C)To maximize the value of the entire firm,managers should make decisions that maximize NPV.
• D)Value additivity does not have important consequences for the value of the entire firm,only on portfolios of firms.

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Definitions:

Gold

A precious metal with a yellow color, used in jewelry, electronics, and as an investment commodity.

Silver

A precious metal with high electrical conductivity and thermal conductivity, widely used in jewelry, currency, and various industrial applications.

Ounces

A unit of weight in the avoirdupois system, equivalent to 1/16th of a pound or approximately 28.349 grams.

Cord

A unit of measure for wood, typically used for firewood or pulpwood, referring to a volume of 128 cubic feet.