Which of the Following Is NOT a True Statement

question 109

Multiple Choice

Which of the following is NOT a true statement?

• A) The payback rule ignores the time value of money.
• B) The discounted payback rule requires a cutoff hurdle be set.
• C) The profitability index is closely related to the payback period.
• D) The AAR is based on accounting data.
• E) There may be multiple IRRs for an independent project.

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Definitions:

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Market Equilibrium

A situation in a market where the quantity of a good or service supplied matches the quantity demanded, leading to a stable price.

Competitive Industry

A market characterized by a large number of firms competing against each other, leading to product diversity, innovation, and fair prices for consumers.

Market Demand

represents the total demand for a product or service within a market, determined by consumers' willingness and ability to buy at various prices.