Which of the Following Statements Is FALSE

question 16

Multiple Choice

Which of the following statements is FALSE?

• A)The profitability index rule of thumb raises the bar on the NPV to take into account the option to wait.
• B)In practice,correctly modeling the sources of uncertainty and the appropriate dynamic decisions usually requires an extensive amount of time and financial expertise.
• C)Some firms use the following rule of thumb: Invest whenever the profitability index is below a specified level.
• D)Instead of raising the bar on the NPV,the hurdle rate rule raises the discount rate.

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