Which of the Following Statements Is FALSE

Multiple Choice

Which of the following statements is FALSE?

A) We can use scenario analysis to evaluate alternative pricing strategies for our project.
B) Scenario analysis considers the effect on net present value (NPV) of changing multiple project parameters.
C) The difference between the internal rate of return (IRR) of a project and the cost of capital tells you how much error in the cost of capital it would take to change the investment decision.
D) Scenario analysis breaks the net present value (NPV) calculation into its component assumptions and shows how the net present value (NPV) varies as each one of the underlying assumptions changes.