In performance evaluations,it is important for managers to ensure that the method of evaluation does not conflict with the ________ method for making capital-budgeting decisions.

Question

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The Net Present Value (NPV) method for making capital-budgeting decisions focuses on the present value of cash flows. It's important for performance evaluations to align with this method to ensure that the evaluations reflect the impact of decisions on the company's value accurately. Other methods like IRR, AARR, or variations thereof, focus on different aspects of investment performance that might not directly correlate with how capital budgeting decisions affect company value in the same way NPV does.

In Performance Evaluations,it Is Important for Managers to Ensure That