Which of the following statements is false regarding the interest rate used in NPV calculations?
A) Some companies use their cost of capital as the discount rate.
B) The interest rate used may be adjusted for uncertainty.
C) It should be equal to the maximum required rate of return needed to make the investment profitable.
D) The interest rate used may be higher or lower than the investment's actual internal rate of return.
C
You might also like to view...
The Carter family has been the successful owner of a manufacturing company for over 50 years. The company has always performed better than expected and was projected to grow for years to come. To help with this growth, the Carters decided to hire a CEO who is not from the family, the first time in its history. After the hire, the performance of the company shifts for the worse, and there is a separation of ownership and managerial control. What factors should the Carter family change?
a. The Carters should appoint a family member as CEO, as research shows that family-owned firms perform better when a member of the family is the CEO. b. The CEO should resign, as he or she is not performing in the interest of the shareholders. c. The CEO should diversify the company, as it has reached the end of its growth projection. d. The Carters should align the goals of the family and the CEO
A deed filed in the public records provides which of the following
a. constructive notice b. escheat c. statute of limitations d. actual delivery