Which of the following is NOT a strength of NPV as a capital budgeting technique
ID: 2790642 • Letter: W
Question
Which of the following is NOT a strength of NPV as a capital budgeting technique?
NPV is an absolute measure of profitability.
NPV never makes a mistake between a good versus bad project.
NPV will occasionally goof-up when deciding between two good projects.
NPV considers Cash Flow After Tax and time value of money in the process.
None of the above.
a.NPV is an absolute measure of profitability.
b.NPV never makes a mistake between a good versus bad project.
c.NPV will occasionally goof-up when deciding between two good projects.
d.NPV considers Cash Flow After Tax and time value of money in the process.
e.None of the above.
Explanation / Answer
Ans c. NPV will occasionally goof-up when deciding between two good projects.
NPV is an absolute measure of profitability, NPV never makes a mistake between a good versus bad project, NPV considers Cash Flow After Tax and time value of money in the process.
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