Which of the Following Statements Is False

question 55

Multiple Choice

Which of the following statements is false?

• A) The profitability index rule of thumb raises the bar on the NPV to take into account the option to wait.
• B) In practice, correctly modeling the sources of uncertainty and the appropriate dynamic decisions usually requires an extensive amount of time and financial expertise.
• C) Some firms use the following rule of thumb: invest whenever the profitability index is below a specified level.
• D) Instead of raising the bar on the NPV, the hurdle rate rule raises the discount rate.