The advantages of NPV are all of the following EXCEPT
A) it can be used as a rough screening device to eliminate those projects whose returns do not materialize until later years.
B) it provides the amount by which positive NPV projects will increase the value of the firm.
C) it allows the comparison of benefits and costs in a logical manner through the use of time value of money principles.
D) it recognizes the timing of the benefits resulting from the project.

Question

Quizplus · Accepted Answer

NPV (Net Present Value) is actually favored for its ability to account for the timing of cash flows, making it a useful tool for evaluating projects with returns that materialize in later years, rather than eliminating them.

The Advantages of NPV Are All of the Following EXCEPT