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:

Scripts

Knowledge structures that define situations and guide behavior.

Schemas

Mental frameworks that help individuals organize and interpret information, based on their experiences and beliefs.

Social Cognition

The study of how people process, store, and apply information about other people and social situations, influencing their perceptions, attitudes, and behaviors.

Priming

Activating an idea in someone’s mind so that related ideas are more accessible.