Which Two Methods of Project Analysis Are the Most Biased

question 48

Multiple Choice

Which two methods of project analysis are the most biased towards short-term projects?

• A)net present value and internal rate of return
• B)internal rate of return and profitability index
• C)payback and discounted payback
• D)net present value and discounted payback
• E)discounted payback and profitability index

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Definitions:

Economic Activity

Actions that involve the production, distribution, and consumption of goods and services within an economy.

Group Structure

The organization of a set of entities under common ownership or control, typically presented through a hierarchy that outlines the relationship between parent companies and subsidiaries.

Separate Financial Statements

Financial statements prepared for an individual company, as opposed to consolidated financial statements which combine the financials of the parent company and its subsidiaries.

AASB 139 Financial Instruments

A standard specifying the recognition and measurement of financial assets and financial liabilities.