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:

Foreign Goods

Products and services that are produced in other countries and then imported into the domestic market.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to determine their relative purchasing power.

Exchange Rate

The price of one country's currency expressed in the currency of another country, facilitating international trade and investment.

Price Levels

Denotes the mean of all existing prices for products and services within an economy.