Which of the following capital budgeting proposals is most likely to display a conflict of interests?
A)the proposal with the highest NPV.
B)the proposal with the longest payback period.
C)the proposal with highest IRR and quickest payback.
D)the proposal to solve pollution problems.

Question

Quizplus · Accepted Answer

The proposal with the highest IRR and quickest payback may seem attractive from a financial perspective, but it may lead to potential conflicts of interest between short-term financial gains and long-term sustainability of the project. It is important to consider the potential long-term consequences of a project when making capital budgeting decisions. The other options do not necessarily indicate a conflict of interest.

Which of the Following Capital Budgeting Proposals Is Most Likely