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.