Which of the following are true regarding capital budgeting tools? (Can be multi

Question

Which of the following are true regarding capital budgeting tools? (Can be multiple)
I. NPV can provide the incorrect answer when faced with unconventional cash flows. II. The IRR and AAR provide answers in %. III. The DPB will always be larger than the PB. IV. The PI is a benefit to cost ratio. Which of the following are true regarding capital budgeting tools? (Can be multiple)
I. NPV can provide the incorrect answer when faced with unconventional cash flows. II. The IRR and AAR provide answers in %. III. The DPB will always be larger than the PB. IV. The PI is a benefit to cost ratio.
I. NPV can provide the incorrect answer when faced with unconventional cash flows. II. The IRR and AAR provide answers in %. III. The DPB will always be larger than the PB. IV. The PI is a benefit to cost ratio.

Explanation / Answer

IV - True This profitability index calculator can be used to figure out the benefit to cost ratio of an investment.

II. - True- The IRR and AAR provide answers in %.

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