The net present value and internal rate of return methods are appropriate for longer-term investments because they ignore the time value of money.

Question

Quizplus · Accepted Answer

The net present value and internal rate of return methods take into account the time value of money, making them suitable for longer-term investments. They discount future cash flows back to their present value, recognizing that money received in the future is worth less than money received today due to inflation and opportunity cost.

The Net Present Value and Internal Rate of Return Methods