Which of the following best describes an approach used in capital budgeting where the present value of cash outflow is subtracted from the present value of cash inflows?
A) Modified NPV
B) NPV
C) EVA
D) Real options

Question

Quizplus · Accepted Answer

The approach described in the question is the Net Present Value (NPV) method. This is a common approach used in capital budgeting to determine the profitability of an investment by calculating the present value of expected cash inflows and subtracting the present value of expected cash outflows. The goal is to determine whether the investment will create value for the company or not.

Which of the Following Best Describes an Approach Used in Capital