Which of the Following Statements Is False

question 66

Multiple Choice

Which of the following statements is false?

• A) The payback investment rule is based on the notion that an opportunity that pays back its initial investments quickly is a good idea.
• B) An IRR will always exist for an investment opportunity.
• C) A NPV will always exist for an investment opportunity.
• D) In general, there can be as many IRRs as the number of times the project's cash flows change sign over time.

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Definitions:

Market's Earnings Expectations

Investor anticipations or forecasts about a company's future earnings performance.

Fair Value

The estimated market value of an asset, liability, or financial instrument that is agreed upon by both the buyer and seller.

Measuring

The process of determining the size, quantity, or degree of something typically through the use of standardized units or instruments.

Good News Earnings Surprises

Instances when a company's reported earnings exceed the expectations of analysts and investors, typically resulting in a positive reaction in the stock market.