All of the following are strengths of NPV EXCEPT
A) it works equally well for independent and mutually exclusive projects.
B) managers have a preference for using a statistic that is in percent instead of dollars.
C) it uses a conservative reinvestment rate assumption.
D) these are all strengths of the NPV statistic.

Question

Quizplus · Accepted Answer

NPV (Net Present Value) is expressed in dollar terms, not in percentages, which contrasts with the preference mentioned in option B. Managers often prefer metrics like IRR (Internal Rate of Return) that are expressed as percentages for easier comparison across projects.

All of the Following Are Strengths of NPV EXCEPT