Which of the Following Statements Is False

question 81

Multiple Choice

Which of the following statements is false?

• A) We can use scenario analysis to evaluate alternative pricing strategies for our project.
• B) Scenario analysis considers the effect on NPV of changing multiple project parameters.
• C) The difference between the IRR of a project and the cost of capital tells you how much error in the cost of capital it would take to change the investment decision.
• D) Scenario analysis breaks the NPV calculation into its component assumptions and shows how the NPV varies as each one of the underlying assumptions change.