Which of the following capital investment models would be preferred when choosing among mutually exclusive alternatives?

Question

Quizplus · Accepted Answer

The NPV (Net Present Value) would be preferred when choosing among mutually exclusive alternatives as it considers the time value of money and provides the net value of the investment project in monetary terms. It also accounts for the initial investment, cash flows, and the required rate of return. By comparing the NPV of different investment alternatives, managers can select the project that will provide the highest return.

Which of the Following Capital Investment Models Would Be Preferred