Which of the Following Statements Is FALSE

question 5

Multiple Choice

Which of the following statements is FALSE?

• A)In general,the IRR rule works for a stand-alone project if all of the project's positive cash flows precede its negative cash flows.
• B)There is no easy fix for the IRR rule when there are multiple IRRs.
• C)The payback rule is primarily used because of its simplicity.
• D)No investment rule that ignores the set of alternative investment alternatives can be optimal.

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Definitions:

Surplus II

An excess of production or supply over demand, leading to potential wastage or decrease in prices.

Total Surplus

The total benefits society gains, encompassed by the addition of consumer surplus and producer surplus within a market.

Consumer Surplus

The variation between the sum consumers are willing to allocate for a good or service and the sum they actually allocate.

Surplus II

An additional amount of a resource, product, or service that exceeds the amount demanded or utilized.