Which of the Following Statements Is False

question 26

Multiple Choice

Which of the following statements is false?

• A) About 75% of firms surveyed used the NPV rule for making investment decisions.
• B) If you are unsure of your cost of capital estimate, it is important to determine how sensitive your analysis is to errors in this estimate.
• C) To decide whether to invest using the NPV rule, we need to know the cost of capital.
• D) NPV is positive only for discount rates greater than the internal rate of return.

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Definitions:

Franchises

Business models where owners license their operations, products, branding, and procedures to independent operators.

Private Sale

The sale of property or goods directly from the owner to a buyer without the use of public auctions or marketplaces.

Commercially Unreasonable

Actions or decisions in business that are not justifiable from a commercial standpoint, often leading to disputes.

Bona Fide Purchaser

An individual who purchases an item in good faith, without knowledge of any existing claims or defects on the property.