Which of the Following Statements Is FALSE

question 86

Multiple Choice

Which of the following statements is FALSE?

• A)Many managers make the mistake of focusing on accounting earnings as opposed to free cash flows.
• B)Given accurate information about any two of these variables (a firm's future cash flows,its cost of capital,and its share price)a valuation model allows us to make inferences about the third variable.
• C)A valuation model will tell us the most about the variable for which our prior information is the least reliable.
• D)The idea that investors are able to identify positive NPV trading opportunities is referred to as the efficient markets hypothesis.

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Definitions:

Business Analysis

The practice of identifying business needs and determining solutions to business problems, often involving the evaluation of business structure, processes, and operations.

Product Development

The process of creating, designing, and bringing a new product to the market.

Prototype

A mock-up of a good, often created individually with the materials the firm expects to use in the final product.

Mock-Up

A full-size model of a design or device, used for product presentations or to evaluate a concept.