Which of the following is true about the net present value method?
A)It is the best single measure of a project's profitability.
B)It is the best single measure of a project's overall risk.
C)It is the best single measure of a project's liquidity risk.
D)It is not a good measure of a project's profitability.

Question

Quizplus · Accepted Answer

The net present value (NPV) method is considered the best single measure of a project's profitability as it takes into account the time value of money and discounts future cash flows to determine the project's present value. NPV focuses on the overall profitability of the project and helps in making decisions that maximize value for the company or investor.

Which of the Following Is True About the Net Present