Which of the Following Statements Is False

question 66

Multiple Choice

Which of the following statements is false?

• A) The payback rule is useful in cases where the cost of making an incorrect decision might not be large enough to justify the time required for calculating the NPV.
• B) The payback rule is reliable because it considers the time value of money and depends on the cost of capital.
• C) For most investment opportunities expenses occur initially and cash is received later.
• D) Fifty percent of firms surveyed reported using the payback rule for making decisions.

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Definitions:

Implied Contract

a contract formed by the actions, behavior, or circumstances of the parties involved, rather than written or spoken words.

Void Contract

A contract that lacks legal validity, making it unenforceable and as if it never existed from the onset.

Voidable Contract

A valid agreement that may be legally voided at the option of one of the parties due to certain conditions such as fraud or duress.

Contract in Place

An existing agreement that has been formally established and is legally binding.