Which of the Following Statements About Discount Rates Is False

question 57

Multiple Choice

Which of the following statements about discount rates is false?

• A) A discount rate for computing NPV cannot change from one period to the next.
• B) The discount rate for a risky investment should be higher than the discount rate for a risk-free investment.
• C) Discount rates can be applied either to the cash flow from a transaction or the taxable income from a transaction.
• D) Both a discount rate for computing NPV cannot change from one period to the next and discount rates can be applied either to the cash flow from a transaction or the taxable income from a transaction.

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Definitions:

Systems Perspective

An analytical framework that views entities as part of larger, interconnected systems, emphasizing the interdependence of parts within the whole.

Psychometric Study

involves the science of measuring mental capacities and processes through various tests and assessments.

Naturalistic Observation

A research method where subjects are observed in their natural environment without any manipulation by the researcher.

Case Study Research

An in-depth analysis of a specific individual, group, event, or situation over a period of time.