The capital budgeting decision model that utilizes all the discounted cash flow of a project is the ________ model,which is one of the single most important models in finance.
A)net present value (NPV)
B)internal rate of return (IRR)
C)profitability index (PI)
D)discounted payback period

Question

Quizplus · Accepted Answer

The net present value (NPV) model is the one that utilizes all the discounted cash flows of a project and is widely regarded as one of the most important models in finance. It calculates the present value of all expected future cash flows, discounted at a rate that reflects the risk and opportunity cost of the investment. Projects with positive NPV are considered acceptable, while those with negative NPV are rejected.

The Capital Budgeting Decision Model That Utilizes All the Discounted