Which of the Following Statements Is FALSE

question 64

Multiple Choice

Which of the following statements is FALSE?

• A)When using the incremental IRR rule,you must keep track of which project is the incremental project and ensure that the incremental cash flows are initially positive and then become negative.
• B)Picking one project over another simply because it has a larger IRR can lead to mistakes.
• C)Problems arise using the IRR method when the mutually exclusive investments have differences in scale.
• D)When the risks of two projects are different,only the NPV rule will give a reliable answer.

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Definitions:

Production Budget

An estimate of the total cost of production, including direct material, labor, and overhead expenses, for a specific period.

Management's Plans

The strategic and operational plans developed by a company's management to achieve its goals and objectives.

Direct Labor Hours

The sum of working hours of employees directly participating in the production of goods or provision of services.

Production Budget

An estimate of the total number of units that must be produced in a given period to meet both sales and inventory needs.