Which of the Following Statements Is False

question 13

Multiple Choice

Which of the following statements is false?

• A) In general, the difference between the cost of capital and the IRR is the maximum amount of estimation error in the cost of capital estimate that can exist without altering the original decision.
• B) The IRR can provide information on how sensitive your analysis is to errors in the estimate of your cost of capital.
• C) 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.
• D) If the cost of capital estimate is more than the IRR, the NPV will be positive.

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Definitions:

Company's Commitment

The dedication and loyalty a company demonstrates towards its goals, employees, and ethical standards.

Policy

A deliberate system of principles to guide decisions and achieve rational outcomes in an organization or government.

Organizing

Organizing divides up tasks and arranges resources to accomplish them.

Controlling

Controlling, in management, involves monitoring performance, comparing it with goals, and taking corrective action as needed to ensure achievement of objectives.