Which of the following investment rules may not use all possible cash flows in its calculations?
A) NPV
B) Payback period
C) IRR
D) All of the above

Question

Quizplus · Accepted Answer

The payback period rule only considers the cash flows up to the point where the initial investment is repaid. It does not take into account any cash flows beyond that point. Therefore, it may not use all possible cash flows in its calculations. In contrast, NPV and IRR use all possible cash flows in their calculations.

Which of the Following Investment Rules May Not Use All