Which of the following is a correct statement?
A) The IRR is considered to be the most important project analysis technique.
B) The AAR is considered preferable to the PI.
C) Discounted payback analysis requires use of a discount rate.
D) It is reasonable to use IRR to analyze mutually exclusive investments.
E) Regular payback analysis is preferable to discounted payback analysis.

Question

Quizplus · Accepted Answer

Discounted payback analysis incorporates the time value of money by discounting the cash flows at a specific discount rate before calculating the payback period, making it a more accurate reflection of a project's profitability compared to the regular payback method which does not consider the time value of money.

Which of the Following Is a Correct Statement