The APV method should be used
A)when the project's level of debt is known over the life of the project.
B)when the project's target debt to value ratio is constant over the life of the project.
C)when the project's debt financing is unknown over the life of the project.
D)when the level of debt doesn't change over the life of the firm.

Question

Quizplus · Accepted Answer

The APV (Adjusted Present Value) method is particularly useful when the project's level of debt is known over its life, as it allows for the separate valuation of tax shields and other financing effects.

The APV Method Should Be Used