Which of the Following Statements Is False

question 11

Multiple Choice

Which of the following statements is false?

• A) The incremental IRR need not exist.
• B) If a change in the timing of the cash flows does not affect the NPV, then the change in timing will not impact the IRR.
• C) Although the incremental IRR rule can provide a reliable method for choosing among projects, it can be difficult to apply correctly.
• D) When projects are mutually exclusive, it is not enough to determine which projects have positive NPVs.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded at various prices.

Quantity Demanded

The specific amount of a good or service consumers are willing to buy at a given price point, holding all else constant.

Quantity Supplied

The total amount of a good that producers are willing to sell at a given price over a specific time period.

Shortage

A situation in which demand for a good or service exceeds the available supply at a specific price.