_________ quantiﬁes, in dollar terms, how stockholder wealth will be affected by undertaking a project.
A) Discounted payback analysis.
B) The average accounting return.
C) The internal rate of return.
D) Net present value.
E) The proﬁtability index.

Question

Quizplus · Accepted Answer

Net present value (NPV) quantifies, in dollar terms, how stockholder wealth will be affected by undertaking a project by calculating the present value of all future cash inflows and outflows of a project, discounted at the required rate of return. NPV is a commonly used and widely accepted method for capital budgeting decisions.

_________ Quantiﬁes, in Dollar Terms, How Stockholder Wealth Will Be