Which of the Following Statements Is False

question 81

Multiple Choice

Which of the following statements is false?

• A) Multiple IRRs result when a project's cash flows alternate between negative and positive values.
• B) If a project has multiple IRRs its NPV profile will cross the x-axis more than once.
• C) The general rule of thumb is that a project will have as many IRRs are there are negative cash flows.
• D) There are occasions when a project's IRR may involve imaginary numbers.
• E) All of the above statements are true.

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Definitions:

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, suggesting that exchange rates should adjust to equalize the price of identical goods in different countries.

Price Level

An overall average price for varied goods and services produced within the economic system.

Dollar Appreciate

The increase in value of the US dollar relative to other currencies in the foreign exchange market.

Canadian Dollar

The currency used in Canada, represented by the symbol CAD.