The Net Present Value Method, Unlike the Internal Rate of Return

question 26

Multiple Choice

The net present value method, unlike the internal rate of return method, does not relate the return to the size of the amount invested. This problem can be overcome by which of these methods?

• A) use of a profitability index
• B) calculation of net present value per $1 of investment
• C) the net present value method used in conjunction with the accounting rate of return method
• D) both A and B

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