Which of the Following Statements Is FALSE

Multiple Choice

Which of the following statements is FALSE?

A) Project externalities are direct effects of the project that may increase or decrease the profits of other business activities of the firm.
B) Incremental earnings are the amount by which the firm's earnings are expected to change as a result of the investment decision.
C) The average selling price of a product and its cost of production will generally change over time.
D) Any money that has already been spent is a sunk cost and therefore irrelevant in the capital budgeting process.