Which of the following investment rules may not use all possible cash flows in its calculations?
A)NPV
B)Payback period
C)IRR
D)Profitability index

Question

Quizplus · Accepted Answer

The payback period rule only considers the initial investment and the cash flows until the investment is paid back. It doesn't consider any cash flows beyond the payback period. The other investment rules, such as NPV, IRR, and profitability index, consider all cash flows over the investment's life.

Which of the Following Investment Rules May Not Use All