Which of the Following Statements Is False

question 23

Multiple Choice

Which of the following statements is false?

• A) The IRR investment rule will identify the correct decision in many, but not all, situations.
• B) By setting the NPV equal to zero and solving for r, we find the IRR.
• C) 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.
• D) The simplest investment rule is the NPV investment rule.

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Definitions:

Transactions

Financial activities or dealings that involve the transfer of money or goods between parties.