Which of the Following Statements Is FALSE

question 64

Multiple Choice

Which of the following statements is FALSE?

• A)When using the incremental IRR rule,you must keep track of which project is the incremental project and ensure that the incremental cash flows are initially positive and then become negative.
• B)Picking one project over another simply because it has a larger IRR can lead to mistakes.
• C)Problems arise using the IRR method when the mutually exclusive investments have differences in scale.
• D)When the risks of two projects are different,only the NPV rule will give a reliable answer.

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Definitions:

Potential Voting Rights

Voting rights that are not currently exercisable or convertible but could potentially give the holder control or significant influence over the decision-making of an entity.

Voting Rights

The rights of shareholders or members to vote on company or organizational matters, usually at meetings like annual general meetings.

Ledger Accounts

Record books or digital records in accounting that are used to store, organize, and summarize a company's financial transactions, sorted by account.