Which of the Following Statements Is False

question 64

Multiple Choice

Which of the following statements is false?

• A) The IRR investment rule states that you should turn down any investment opportunity where the IRR is less than the opportunity cost of capital.
• B) The IRR investment rule states that you should take any investment opportunity where the IRR exceeds the opportunity cost of capital.
• C) Since the IRR rule is based upon the rate at which the NPV equals zero, like the NPV decision rule, the IRR decision rule will always identify the correct investment decisions.
• D) There are situations in which multiple IRRs exist.

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Definitions:

Recency Effect

A memory phenomenon that involves the ability to recall the last items in a series better than those in the middle.

Summary

A brief statement or account of the main points of something.

Mnemonist

An individual with the ability to remember vast amounts of information, sometimes with the help of advanced mnemonic techniques.

Hypnotist

A practitioner who induces a state of consciousness in a person in which they purportedly lose the power of voluntary action and become highly responsive to suggestion or direction.