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.

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