Which of the following statements is false? If you are unsure of your cost of capital estimate,
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Question:
Which of the following statements is false?
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.
If the cost of capital estimate is more than the IRR, the NPV will be positive.
In general, the difference between the cost of capital and the IRR is the maximum amount of estimation error in the cost of capital estimate that can exist without altering the original decision.
The IRR can provide information on how sensitive your analysis is to errors in the estimate of your cost of capital.
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