Which of the Following Statements Is FALSE

question 27

Multiple Choice

Which of the following statements is FALSE?

• A)About 75% of firms surveyed used the NPV rule for making investment decisions.
• B)If you are unsure of your cost of capital estimate,it is important to determine how sensitive your analysis is to errors in this estimate.
• C)To decide whether to invest using the NPV rule,we need to know the cost of capital.
• D)NPV is positive only for discount rates greater than the internal rate of return.

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Definitions:

FHA Loans

Mortgages insured by the Federal Housing Administration, designed to help borrowers obtain homes by lowering some of the costs of their mortgage loans.

Baby Boom

The significant increase in the birth rate observed in various countries, particularly in the United States, following World War II, from approximately 1946 to 1964.

Suburban Developments

Residential areas situated on the outskirts of major cities that are characterized by lower population density, distinct neighborhoods, and often, a greater emphasis on community.

Tract Home Construction

Tract home construction involves building multiple homes based on a set of standardized designs and layouts, typically found in suburban developments.