Which of the Following Statements Is False

question 8

Multiple Choice

Which of the following statements is false?

• A) In general, the IRR rule works for a stand-alone project if all of the project's positive cash flows precede its negative cash flows.
• B) There is no easy fix for the IRR rule when there are multiple IRRs.
• C) The payback rule is primarily used because of its simplicity.
• D) No investment rule that ignores the set of alternative investment alternatives can be optimal.

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Definitions:

Inventory

The total amount of goods or materials a business has in stock, potentially for sale or production.

Outlived Usefulness

Refers to an asset or item that has exceeded its functional or strategic value to an organization or individual.

Aging Accounts Receivable

A method of managing accounts receivable by categorizing them according to the length of time an invoice has been outstanding.

Present Value

The current value of a future amount of money or stream of cash flows, given a specified rate of return.