In situations where the required rate of return is NOT constant for each year of the project, it is advantageous to use:
A)the adjusted rate-of-return method
B)the internal rate-of-return method
C)the net present value method
D)sensitivity analysis

Question

Quizplus · Accepted Answer

The net present value method is advantageous in situations where the required rate of return is not constant because it allows for the discounting of cash flows at different rates for each year, reflecting the varying required rates of return.

In Situations Where the Required Rate of Return Is NOT