Question
Which of the following statements is incorrect? a. Capital rationing puts a funding constraint on investments and makes some projects mutually exclusive. b. The NPV
Which of the following statements is incorrect?
a. Capital rationing puts a funding constraint on investments and makes some projects mutually exclusive.
b. The NPV makes it possible to correctly choose between mutually exclusive projects.
c. A project's payback period provides an objective measure of its incremental value to the firm's investors, and thus makes it simple to choose between two or more mutually exclusive projects.
d. Most of the answers are correct except one.
e. The ARR is based on accounting numbers and ignores the time value of money.
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