Which one of the following statement is incorrect? a. If projects are of a different scale, the IRR rule may give an inc
Posted: Sun Apr 10, 2022 8:41 am
Which one of the following statement is incorrect?
a. If projects are of a different scale, the IRR rule may give
an incorrect ranking and result in selection of a project with a
lower NPV.
b. NPV profile shows the NPV for different values of the cost of
capital.
c. If there are negative cash flows after the first positive
cash flows from a project, it is impossible for there to be
multiple internal rates of return.
d. NPV profile is useful if there is some doubt as to the true cost
of capital.
a. If projects are of a different scale, the IRR rule may give
an incorrect ranking and result in selection of a project with a
lower NPV.
b. NPV profile shows the NPV for different values of the cost of
capital.
c. If there are negative cash flows after the first positive
cash flows from a project, it is impossible for there to be
multiple internal rates of return.
d. NPV profile is useful if there is some doubt as to the true cost
of capital.