Net Present Value

question 202

Multiple Choice

Net present value:

• A) Cannot be used when deciding between two mutually exclusive projects.
• B) Is more useful to decision makers than the internal rate of return when comparing different sized projects.
• C) Is easy to explain to non-financial managers and thus is the primary method of analysis used by the lowest levels of management.
• D) Is computed the same as present value when using excel spreadsheets to analyze a project.
• E) Is very similar in its methodology to the average accounting return.

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