Which of the following statements is false?
A)Accepting a project with an internal rate of return greater than the required rate of return should result in an increase in a firm's share price.
B)Accepting a project with an internal rate of return greater than the required rate of return should result in a positive net present value.
C)Accepting a project with an internal rate of return less than the required rate of return should result in a negative net present value.
D)Accepting a project with an internal rate of return equal to the required rate of return should result in an increase in a firm's share price.

Question

Quizplus · Accepted Answer

Accepting a project with an internal rate of return equal to the required rate of return should not result in an increase in a firm's share price. This is because in this case, the net present value of the project would be zero, meaning the project would not add any value to the firm. A project with a positive net present value would result in an increase in the firm's share price.

Which of the Following Statements Is False