Which of the Following Statements Is FALSE

question 48

Multiple Choice

Which of the following statements is FALSE?

• A)When the investment cannot be delayed,the optimal rule is to invest whenever the profitability index is greater than zero.
• B)It is often better to wait too long (use a profitability index criterion that is too high)than to invest too soon (use a profitability index criterion that is too low).
• C)When the source of uncertainty that creates a motive to wait is interest rate uncertainty,the hurdle rate is relatively easy to calculate.
• D)When there is an option to delay,a good rule of thumb is to invest only when the profitability index is at least 1.

---

Definitions:

National Income

A measure of the total value of all goods and services produced by a country over a specific period, typically adjusted for net income from foreign investments.

Money

A medium of exchange that facilitates the sale, purchase, or trade of goods and services, acting as a unit of account, a store of value, and a standard of deferred payment.

Perceived Limitation

The personal belief or interpretation that one's abilities or conditions are restricted in some way.

Future Time

A concept referring to moments that have yet to occur or periods of time that lie ahead in the future.