Which of the following statements is FALSE?
A) The payback investment rule is based on the notion that an opportunity that pays back its initial investments quickly is a good idea.
B) An internal rate of return (IRR) will always exist for an investment opportunity.
C) A net present value (NPV) will always exist for an investment opportunity.
D) In general, there can be as many internal rates of return (IRRs) as the number of times the project's cash flows change sign over time.

Question

Quizplus · Accepted Answer

It is possible for an investment opportunity to have no internal rate of return (IRR) if the cash flows are such that there is no discount rate that will make the net present value (NPV) of the opportunity equal to zero. This situation is known as a non-conventional cash flow pattern.

Which of the Following Statements Is FALSE