In preference decision situations, a project with a high net present value will always be preferable to a project with a lower net present value.

Question

Quizplus · Accepted Answer

Net present value (NPV) is an important criterion for evaluating investments, but it should not be the only factor considered. Other factors such as the size and timing of cash flows, risk, strategic fit, and social and environmental impact should also be taken into account. Therefore, a project with a higher NPV might not always be preferable if it has significant drawbacks in other areas.

In Preference Decision Situations, a Project with a High Net