The net present value rule is a valid method for determining the retirement of assets.

Question

Quizplus · Accepted Answer

The net present value (NPV) rule is a valid method for determining whether an investment or project is financially viable. It involves calculating the present value of expected future cash flows minus the initial investment cost, and if the resulting NPV is positive, the investment is considered financially feasible. This same principle can be applied to the retirement of assets, where the cost savings associated with retiring an old or inefficient asset are compared to the cost of replacing it with a new one. Therefore, the NPV rule can be a valid method for determining the retirement of assets.

The Net Present Value Rule Is a Valid Method for Determining