The __________ decision rule is considered the "best" in principle.
A) Internal rate of return.
B) Payback period.
C) Average accounting return.
D) Net present value.
E) Profitability index.

Question

Quizplus · Accepted Answer

The Net Present Value (NPV) decision rule is considered the "best" in principle because it directly measures the increase in value to the firm, taking into account the time value of money and all cash flows associated with the investment.

The __________ Decision Rule Is Considered the "Best" in Principle