Which of the following statements is FALSE? CTD OA. If you are unsure of your cost of capital estimate, it is important to determine how sensitive your analysis is to errors in this estimate OB. In general, the difference between the cost of capital and the internal rate of retum (RR) is the maximum amount of estimation error OC. The internal rate of retum (RR) can provide information on how sensitive your analysis ist enors in the estimate of your cost of capital OD. the cost of capital estimate is more than the indemal rate of return (RR), the net present value (NPV) will be positive

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Which of the following statements is FALSE?
CIC)
OA. If you are unsure of your cost of capital estimate, it is important to determine how sensitive your analysis is to errors in this estimate
OB. In general, the difference between the cost of capital and the internal rate of retum (IRR) is the maximum amount of estimation error in the cost of capital estimate that can exist without altering the original decision
OC. The internal rate of rebum (IRR) can provide information on how sensitive your analysis is to errors in the estimate of your cost of capital
OD. If the cost of capital estimats is more than the internal rate of return (RR), the net present value (NPV) will be positive
Transcribed Image Text:Which of the following statements is FALSE? CIC) OA. If you are unsure of your cost of capital estimate, it is important to determine how sensitive your analysis is to errors in this estimate OB. In general, the difference between the cost of capital and the internal rate of retum (IRR) is the maximum amount of estimation error in the cost of capital estimate that can exist without altering the original decision OC. The internal rate of rebum (IRR) can provide information on how sensitive your analysis is to errors in the estimate of your cost of capital OD. If the cost of capital estimats is more than the internal rate of return (RR), the net present value (NPV) will be positive
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