Many firms combine net present value and payback when analyzing project risk. Which of the following statements is (are) correct?
I. Both payback and net present value consider the frequency of cash flows.
II. Both payback and net present value can be adjusted for risk.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Question

Many firms combine net present value and payback when analyzing project risk. Which of the following statements is (are) correct? 
I. Both payback and net present value consider the frequency of cash flows.
II. Both payback and net present value can be adjusted for risk.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Quizplus · Accepted Answer

The Answer of Many firms combine net present value and payback when analyzing project risk. Which of the following statements is (are) correct? 
I. Both payback and net present value consider the frequency of cash flows.
II. Both payback and net present value can be adjusted for risk.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Many Firms Combine Net Present Value and Payback When Analyzing