1. For many companies,internally generated funds are the primary source of funding for capital projects.Which of thefollowing statementsregarding internally generated funds is false?

A. Internally generated funds represent operating cash flows that have not been paid out as dividends

B. The use of internally generated funds allows companies to avoid transaction costs associated with new debt or equity issues

C. The accumulation of internally generated funds helps to reduce the risk of agency problems

D. Management's preference for internally generated funds over other sources of funds is consistent with pecking order theory