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Although NPV Is the Best Capital Budgeting Technique, Most Executives

Question 30

Multiple Choice

Although NPV is the best capital budgeting technique, most executives prefer to use:


A) payback because the calculations are easy.
B) profitability index because they are familiar with ratios.
C) IRR because people are more comfortable with rates of return than with the somewhat abstract notion of a present valued dollar.
D) NPV adjusted for inflation because it overcomes the difficulties they have with the method.

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