Which of the Following Statements Is False

question 45

Multiple Choice

Which of the following statements is false?

• A)Accepting a project with an internal rate of return greater than the required rate of return should result in an increase in a firm's share price.
• B)Accepting a project with an internal rate of return greater than the required rate of return should result in a positive net present value.
• C)Accepting a project with an internal rate of return less than the required rate of return should result in a negative net present value.
• D)Accepting a project with an internal rate of return equal to the required rate of return should result in an increase in a firm's share price.

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Definitions:

Discount Loans

Loans on which the interest and financing charges are deducted from the amount before the borrower receives it.

Interest

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal amount.

Principal

This term refers to the original sum of money borrowed in a loan or the initial amount of investment before earnings or losses.

Expansionary Gap

A situation where the output of an economy is greater than the full employment output, often leading to inflation.