The Net Present Value Method (NPV) Is a More Conservative

question 15

Multiple Choice

The net present value method (NPV) is a more conservative technique for selecting investment projects than the internal rate of return method because the NPV method

• A) assumes that cash flows are reinvested at the project's internal rate of return.
• B) concentrates on the liquidity aspects of investment projects.
• C) assumes that cash flows are reinvested at the firm's weighted average cost of capital.
• D) None of these options are true.

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