For which capital investment evaluation technique is the following a complete list of its disadvantages when compared to NPV analysis? (1) Ignores cash flows beyond the cutoff date; (2) Requires an arbitrary cutoff point; (3) Biased against long-term projects; (4) May reject positive NPV projects.
A) NPV
B) IRR
C) AAR
D) Payback period
E) Discounted payback
Correct Answer:
Verified
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