Which of the Following Statements Is False

Which of the following statements is false?

A) When the investment cannot be delayed, the optimal rule is to invest whenever the profitability index is greater than zero.
B) It is often better to wait too long (use a profitability index criterion that is too high) than to invest too soon (use a profitability index criterion that is too low) .
C) When the source of uncertainty that creates a motive to wait is interest rate uncertainty, the hurdle rate is relatively easy to calculate.
D) When there is an option to delay, a good rule of thumb is to invest only when the profitability index is at least 1.

Correct Answer:

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