The Main Reason That the NPV Method Is Regarded as Being

question 90

True/False

The main reason that the NPV method is regarded as being conceptually superior to IRR method for evaluating mutually exclusive investments is that multiple IRRs may exist.

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Definitions:

Bad Debt Expense

An anticipated expense account reflecting the estimated amount of receivables that a company does not expect to collect.

Finance Company

A business that provides loans to individuals and companies, apart from traditional bank lending activities, including consumer credit, leasing, and investment financing.

Statement Of Cash Flows

A financial statement that summarizes information about the cash inflows (receipts) and cash outflows (payments) for a specific period of time.

Promissory Note

A financial instrument in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand.