The net present value, profitability index, internal rate of return, and modified internal rate of return methods will provide consistent investment decisions for independent projects with normal cash flows.

Question

Quizplus · Accepted Answer

These methods are all designed to evaluate the future cash flows of an investment project and determine its potential profitability. As long as the cash flows are normal (i.e. there is only one change in the signs of the cash flows), these methods should provide consistent investment decisions.

The Net Present Value, Profitability Index, Internal Rate of Return