Final answer:
The false statement is (d), as the optimal investment decision is generally to proceed when the NPV of investing today exceeds the option value of waiting, not just when the NPV is positive but close to zero. Therefore, the correct option is C.
Step-by-step explanation:
The false statement among the options given is (d) when you have the option of deciding when to invest, it is usually optimal to invest only when the NPV is positive but close to zero. This is incorrect because typically, the decision to invest is optimal when the net present value (NPV) of investing today is greater than the option value of waiting to invest.
A positive NPV that is not close to zero still represents an investment that is expected to generate value over and above the cost of capital. The option of waiting may have value, particularly in uncertain environments where waiting can provide additional information or favorable conditions that could improve the investment outcome.
However, it is essential to compare the NPV of an investment opportunity against the value of the option to wait. This stems from the concept of real options in finance, deriving from option pricing theory, which states that the option to wait actually has value that must be considered alongside the NPV.
It is the combination of both that should guide the investment decision. Furthermore, when the option to wait is not present, and a project presents a positive NPV, it is generally optimal to proceed with the investment, as noted in option (c).