Which of the Following Statements Is FALSE

question 51

Multiple Choice

Which of the following statements is FALSE?

• A)When evaluating a capital budgeting decision,the correct tax rate to use is the firm's average corporate tax rate.
• B)To determine the capital budget,firms analyze alternative projects and decide which ones to accept through a process called capital budgeting.
• C)A new product typically has lower sales initially,as customers gradually become aware of the product.
• D)Sunk costs have been or will be paid regardless of the decision whether or not to proceed with the project.

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Definitions:

Unearned Rent

Refers to the amount received by a landlord for rent which has not yet been earned because the rental period has not occurred.

Rent Revenue

Income received from leasing out property or equipment to another party for a specified term.

Adjusting Entry

An accounting entry made into the books of accounts at the end of an accounting period to record any unrecognized income or expenses for that period.

Unearned Rent

Income received in advance for rental periods that have not yet occurred, recognized as a liability until the service period is completed.