Which of the Following Statements Is False

question 85

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 = k (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:

Monopoly Firm

A single business or corporation that controls a significant portion or all of the market for a particular type of product or service.

Cost Per Unit

The total expense incurred to produce, store, and sell one unit of a product, including overhead costs.

Economic Profits

Profits earned by a firm or individual after considering both explicit financial costs and the implicit costs of alternatives forgone.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance, remaining constant regardless of the amount of goods or services produced.