Which of the following can be used to place capital investment proposals involving different amounts of investment on a comparable basis for purposes of net present value analysis?

Question

Quizplus · Accepted Answer

The present value index allows proposals with different amounts of investment to be compared on a comparable basis for net present value analysis. It takes into account the initial investment cost and the present value of the expected cash inflows over the project's life. The price-level index measures changes in the price level over time, while the future value index and rate of investment index are not relevant for comparing capital investment proposals on a comparable basis for net present value analysis.

Which of the Following Can Be Used to Place Capital