Which of the Following Statements Is FALSE

question 35

Multiple Choice

Which of the following statements is FALSE?

• A)In general,the difference between the cost of capital and the IRR is the maximum amount of estimation error in the cost of capital estimate that can exist without altering the original decision.
• B)The IRR can provide information on how sensitive your analysis is to errors in the estimate of your cost of capital.
• C)If you are unsure of your cost of capital estimate,it is important to determine how sensitive your analysis is to errors in this estimate.
• D)If the cost of capital estimate is more than the IRR,the NPV will be positive.

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Definitions:

CPM

Stands for Critical Path Method; a step-by-step project management technique for process planning that defines critical and non-critical tasks.

Project Organization

A structured setup designed specifically for managing projects, involving roles, responsibilities, and frameworks that direct how a project is executed and controlled.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values, indicating how spread out the data points are from the mean.

Cost/Time Trade-Off

A project management concept that emphasizes the relationship between the cost of completing a project and the time it takes to complete it, indicating that decreasing the completion time often results in increased costs.