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.
Correct Answer:
Verified
Q25: Which of the following statement(s)is(are)true for the
Q26: A decrease in the cost of capital
Q27: The MIRR is an interest rate that:
A)equates
Q28: The profitability index (PI)is particularly useful in
Q29: Consider a project with an initial investment
Q31: One weakness of the internal rate of
Q32: The most difficult part of the capital
Q33: Which of the following is the most
Q34: The NPV and IRR techniques can give
Q35: The modified internal rate (MIRR)of return eliminates
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