Which of the Following Statements Is False

question 63

Multiple Choice

Which of the following statements is false?

• A) It is possible that an IRR does not exist for an investment opportunity.
• B) If the payback period is less than a pre-specified length of time you accept the project.
• C) The internal rate of return (IRR) investment rule is based upon the notion that if the return on other alternatives is greater than the return on the investment opportunity you should undertake the investment opportunity.
• D) It is possible that there is no discount rate that will set the NPV equal to zero.

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Definitions:

Reasonable Care

The degree of caution and concern an ordinarily prudent and rational person would use in similar circumstances, typically used in legal contexts.

Voidable Contract

An agreement that may be annulled or declared void by one of the parties due to certain legal deficiencies or circumstances.

Rescinded

The act of revoking, canceling, or repealing a contract, decision, or agreement, making it as if it never existed.

Scienter

Deliberately or knowingly.