Which of the following statements regarding capital budgeting criteria is INCORR

Question

Which of the following statements regarding capital budgeting criteria is INCORRECT?

A. The net present value profile shows how the NPV of an investment is affected
by the discount rate.

B. When the selection of one project eliminates the option of selecting the other
project, the two projects are called mutually exclusive.

C. The net present value rule is generally considered to be the best capital
budgeting rule.

D. The net present value is positive when the required return exceeds the internal
rate of return.

A. The net present value profile shows how the NPV of an investment is affected
by the discount rate.

B. When the selection of one project eliminates the option of selecting the other
project, the two projects are called mutually exclusive.

C. The net present value rule is generally considered to be the best capital
budgeting rule.

D. The net present value is positive when the required return exceeds the internal
rate of return.

Explanation / Answer

Answer:

D. The net present value is positive when the required return exceeds the internal
rate of return. = INCORRECT

Because net present value is positive when the required return is less than the internal
rate of return

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.