When different investment rules give conflicting answers, then decisions should be based on the Net Present Value rule, as it is the most reliable and accurate decision rule.

Question

Quizplus · Accepted Answer

The Net Present Value (NPV) rule takes into account the time value of money and all relevant cash flows, making it the most reliable and accurate decision rule compared to other investment rules that may only consider certain aspects of the investment. Therefore, when different investment rules give conflicting answers, the decision should be based on the NPV rule.

When Different Investment Rules Give Conflicting Answers, Then Decisions Should