Given that the net present value (NPV) is generally considered to be the best method of analysis, why should you still use the other methods?
A) The other methods help validate whether or not the results from the net present value analysis are reliable.
B) You need to use the other methods since conventional practice dictates that you only accept projects after you have generated three accept indicators.
C) You need to use other methods because the net present value method is unreliable when a project has unconventional cash flows.
D) The average accounting return must always indicate acceptance since this is the best method from a financial perspective.
E) The discounted payback method must always be computed to determine if a project returns a positive cash flow since NPV does not measure this aspect of a project.
Correct Answer:
Verified
Q379: Which one of the following is a
Q380: An investment has the following cash flows.
Q381: Based on the profitability index (PI) rule,
Q382: Would you accept a project which is
Q383: Jack is considering adding toys to his
Q385: Without using formulas, provide a definition of
Q386: You are considering two independent projects with
Q387: Without using formulas, provide a definition of
Q388: Given our goals of firm value and
Q389: What is the net present value of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents