The Net Present Value Method Is a Better Method of Evaluation

question 26

Multiple Choice

The net present value method is a better method of evaluation than the internal rate of return method because

• A) the NPV method discounts cash flows at the internal rate of return.
• B) the NPV method is a more liberal method of analysis.
• C) the NPV method discounts cash flows at higher than the firm's cost of capital.
• D) none of the other answers are correct.

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