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:

Public Outlay

The total amount of government spending, including expenditures on public services, infrastructure, and welfare programs.

Printing Money

The process by which the central bank increases the money supply by physically creating more currency.

Deflation

A decrease in the general price level of goods and services, often indicating a contraction in the supply of money and credit in the economy.

Natural Resources

Raw materials supplied by nature that are used to produce goods and services.