Which of the Following Statements Is FALSE

question 21

Multiple Choice

Which of the following statements is FALSE?

• A)The firm deducts a fraction of the investments in plant,property,and equipment each year as depreciation.
• B)If securities are fairly priced,the net present value of a fixed set of cash flows is independent of how those cash flows are financed.
• C)Sunk cost fallacy is a term used to describe the tendency of people to ignore sunk costs in capital budgeting analysis.
• D)A good rule to remember is that if our decision does not affect a cash flow then the cash flow should not affect our decision.

---

Definitions:

Encoding

The initial process of converting information into a form that can be stored in memory.

Retrieval

The process of getting information out of memory storage to be used in response to a cue or question.

Critical Thinking Skill

The ability to analyze information objectively, evaluate arguments and evidence, and make reasoned judgments and decisions.

Encoding

The act of altering information into a state that can be preserved in memory.