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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