In comparing two investment alternatives,the difference between the net present values of the two alternatives obtained using the total cost approach will be the same as the net present value obtained using the incremental cost approach.

Question

Quizplus · Accepted Answer

The total cost approach and the incremental cost approach should yield the same net present value difference between two investment alternatives, as both methods ultimately compare the same cash flows.

In Comparing Two Investment Alternatives,the Difference Between the Net Present