Which of the Following Statements Is Incorrect

question 155

Multiple Choice

Which of the following statements is incorrect?

• A) The further into the future a cash receipt is expected to occur, the lower is its present value.
• B) The return on investment measures the compensation a company expects to receive from investing in capital assets.
• C) Most companies use their cost of capital to estimate the minimum return on investment required from capital investments.
• D) When a company invests in capital assets, it sacrifices future dollars for the opportunity to receive present dollars.