Which One of These Criticisms Applies to Net Present Value

question 51

Multiple Choice

Which one of these criticisms applies to net present value analysis?

• A)Net present value is too nearsighted.
• B)Net present value analysis cannot be integrated with sensitivity analysis.
• C)Real options cannot be included in net present value analysis.
• D)Managers may acquire a false sense of security based on a project's net present value.
• E)Net present value analysis cannot be integrated with scenario analysis.

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Definitions:

Sale of Goods Act

Legislation governing the sale of goods, ensuring rights, and obligations for both seller and buyer.

Business Transactions

Activities or dealings between parties involving the exchange of goods, services, or financial assets.

Legislation

Laws and statutory regulations enacted by a government's legislative branch.

Durability

The ability of a product or material to withstand wear, pressure, or damage; its quality of being long-lasting or enduring.