Question

Which of the following statements is false concerning the financial analysis of projects?

a. The higher the net present value the better
b. A shorter payback period is better than a longer one
c. The required rate of return is the discount rate that results in an NPV of zero for the project
d. ROI is the result of subtracting the project costs from the benefits and then dividing by the costs

Answer 1

The false statement concerning the financial analysis of projects is option d, "ROI is the result of subtracting the project costs from the benefits and then dividing by the costs". ROI measures the profitability of an investment, not the project costs.

Step-by-step explanation:

The false statement concerning the financial analysis of projects is option d, "ROI is the result of subtracting the project costs from the benefits and then dividing by the costs."ROI (Return on Investment) is calculated by dividing the net profit of a project by the initial investment cost, not the project costs. It measures the profitability of an investment.