An independent project has conventional cash ﬂows and a positive net present value. It can be stated with certainty that the project is acceptable according to the capital budgeting technique
Known as:
A) Payback.
B) Discounted payback.
C) The accounting rate of return.
D) The crossover method.
E) The internal rate of return.

Question

Quizplus · Accepted Answer

The fact that the project has positive net present value indicates that the project's inflows exceed its outflows, which also means that the internal rate of return (IRR) is greater than the required rate of return. Since the IRR is considered the most accurate capital budgeting technique for evaluating independent projects, it can be stated with certainty that the project is acceptable.

An Independent Project Has Conventional Cash ﬂOws and a Positive