An advantage of the net present value method for evaluating investment proposals over the internal rate of return method is that:
A)only one set of present value calculations using a required discount rate is made.
B)the actual rate of return on the project is calculated.
C)projects can be ranked in order of profitability using the net present value amount.
D)estimates of future cash flows do not have to be made.

Question

Quizplus · Accepted Answer

The net present value method requires only one set of present value calculations using a required discount rate, making it simpler and less prone to multiple interpretations compared to the internal rate of return method.

An Advantage of the Net Present Value Method for Evaluating