In situations where the required rate of return is not constant for each year of the project, it is advantageous to use ________.
A) the nominal rate-of-return method
B) the internal rate-of-return method
C) the net present value method
D) the projected income method

Question

Quizplus · Accepted Answer

The net present value (NPV) method is advantageous in situations where the required rate of return is not constant for each year of the project because it can discount cash flows at different rates for different years, accurately reflecting the changing cost of capital or risk profile over time.

In Situations Where the Required Rate of Return Is Not