With respect to the capital budgeting practices of large U. S. corporations
A) the profitability index has been gaining in popularity.
B) IRR and NPV have been gaining in popularity.
C) payback and discounted payback have been gaining in popularity.
D) IRR and NPV have declined in popularity.

Question

Quizplus · Accepted Answer

IRR (internal rate of return) and NPV (net present value) have been gaining in popularity for capital budgeting practices among large U.S. corporations. This is because they provide a more comprehensive analysis of a project's potential profitability and suitability for investment compared to simpler methods like payback and discounted payback. The profitability index, while still a useful tool, has not seen the same level of increase in popularity as IRR and NPV. There is no evidence to suggest that IRR and NPV have declined in popularity.

With Respect to the Capital Budgeting Practices of Large U