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The Net Present Value Method Is a Better Method of Evaluation

Question 57

Multiple Choice

The net present value method is a better method of evaluation than the internal rate of return method because:


A) the NPV method discounts cash flows at the internal rate of return.
B) the NPV method is a more liberal method of analysis.
C) the NPV method discounts cash flows at higher than the firm's cost of capital.
D) the NPV method allows the financial manager to select between mutually exclusive projects.

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