Which of the Following Statements Is False

question 39

Multiple Choice

Which of the following statements is false?

• A) The NPV will be positive if the IRR is less than the required rate of return.
• B) If the multiple IRR problem does not exist,any independent project acceptable by the NPV method will also be acceptable by the IRR method.
• C) When IRR = r (the required rate of return),NPV = 0.
• D) The IRR can be positive even if the NPV is negative.
• E) The NPV method is not affected by the multiple IRR problem.

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Definitions:

Estimated Annual Overhead Costs

An approximation of the indirect costs that a business expects to incur over a year in its operations.

Expected Annual Operating Activity

The projected level of operations, including production and sales, anticipated for a company over a year.

Common Activity Base

A measure used in activity-based costing for allocating overhead and indirect costs to products or services based on relevant activities.

Job Cost Sheet

A document that records the materials, labor, and manufacturing overhead costs assigned to an individual job or project.