Which of the following does not characterize NPV?
A) NPV does not explicitly incorporate risk into the analysis.
B) NPV incorporates all relevant cash flow information.
C) NPV uses all of the project's cash flows.
D) NPV discounts all future cash flows.
E) Using NPV will lead to decisions that maximize shareholder wealth.

Question

Quizplus · Accepted Answer

NPV actually does incorporate risk into the analysis by using a discount rate that reflects the riskiness of the project's cash flows.

Which of the Following Does Not Characterize NPV