The "gold standard" of investment criteria refers to the:
A) net present value.
B) internal rate of return.
C) payback period.
D)profitability index.

Question

Quizplus · Accepted Answer

Net present value (NPV) is considered the "gold standard" of investment criteria because it takes into account the time value of money, meaning that it adjusts expected future cash flows to their present value. This allows for a more accurate assessment of the potential profitability of the investment. NPV is favored over other investment criteria such as internal rate of return (IRR), payback period, and profitability index because it is more comprehensive and flexible in evaluating investment options.

The "Gold Standard" of Investment Criteria Refers to The