Which One of the Following Statements Is NOT True

question 45

Multiple Choice

Which one of the following statements is NOT true?

• A) Private equity firms pool money from wealthy investors, pension funds, insurance companies, and other sources to make investments.
• B) Private equity firms invest in more mature companies.
• C) Private equity firms invest in new companies.
• D) Private equity investors focus on firms that have stable cash flows because they use a lot of debt to finance their acquisitions.

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Definitions:

Net Present Value

A method used in capital budgeting to analyze the profitability of an investment, calculating the difference between present values of cash inflows and outflows.

Proposed Project

A planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.

Net Present Value

The divergence in current value of cash inflows versus outflows over an established time frame.

Net Present Value

A method used to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period.