It is appropriate to develop several different design approaches to meeting system requirements for a project.Capital budgeting techniques are used to evaluate the economic merits of each alternative.The technique where estimated future cash flows are discounted back to the present is referred to as
A)the future value method.
B)the internal rate of return.
C)the net present value method.
D)the payback method.

Question

Quizplus · Accepted Answer

The technique where estimated future cash flows are discounted back to the present is referred to as the net present value (NPV) method, which is one of the most widely used capital budgeting techniques. NPV takes into account the time value of money and provides a measure of the project's profitability by calculating the difference between the present value of cash inflows and the present value of cash outflows associated with the project. Choosing the alternative with the highest NPV would maximize the economic benefits of the project. Therefore, C is the best choice.

It Is Appropriate to Develop Several Different Design Approaches to Meeting