Arguments against using the net present value and internal rate of return methods include that
A) they fail to use accounting profits.
B) they require detailed long-term forecasts of the incremental benefits and costs.
C) they fail to consider how the investment project is to be financed.
D) they fail to use the cash flow of the project.

Question

Quizplus · Accepted Answer

The net present value and internal rate of return methods require detailed long-term forecasts of the incremental benefits and costs, making them time-consuming and potentially inaccurate. However, this does not necessarily mean they should not be used, as their analysis can provide valuable insight into the potential profitability of a project. The other options listed are not accurate criticisms of the net present value and internal rate of return methods.

Arguments Against Using the Net Present Value and Internal Rate