When Considering the Time Value of Money, Which of the Following

question 95

Multiple Choice

When considering the time value of money, which of the following four methods of project evaluation would appear to be the least satisfactory?

• A) internal rate of return
• B) profitability index
• C) net present value
• D) payback period method

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Definitions:

Larger Sample Sizes

Referring to the use of a greater number of observations in a study, which can enhance the reliability and precision of statistical estimates.

Estimators

Statistics obtained from sample data used to estimate population parameters.

Unbiasedness

A statistical property indicating that an estimator or methodology does not systematically favor certain outcomes over others.

Sample Variance

The measure of variability in a sample dataset, calculated as the sum of squared deviations from the mean, divided by the number of observations minus one.