Which of the following statements is true about capital investment decisions:
A) the project with the highest net present value will always be selected.
B) the project with the highest internal rate of return will always be selected.
C) the project with the highest net present value may not always be selected.
D)the project with the highest accounting rate of return will always be selected.

Question

Quizplus · Accepted Answer

Capital investment decisions cannot be based solely on net present value or internal rate of return. Other factors, such as the availability of funds, project timelines, and risk factors, must also be considered. Therefore, the project with the highest net present value may not always be selected. The same applies to the accounting rate of return.

Which of the Following Statements Is True About Capital Investment