Given That the Net Present Value (NPV) Is Generally Considered

question 58

Multiple Choice

Given that the net present value (NPV) is generally considered to be the best method of analysis,why should you still use the other methods?

• A) The other methods help validate whether or not the results from the net present value analysis are reliable.
• B) You need to use the other methods since conventional practice dictates that you only accept projects after you have generated three accept indicators.
• C) You need to use other methods because the net present value method is unreliable when a project has unconventional cash flows.
• D) The internal rate of return must always indicate acceptance since this is the best method from a financial perspective.
• E) The discounted payback method must always be computed to determine if a project returns a positive cash flow since NPV does not measure this aspect of a project.

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Definitions:

Self-Modification Program

A self-directed plan designed to change one's behavior or habits through a structured process of self-observation, goal-setting, and reinforcement.

Positive Reinforcement

In behaviorism, a process by which the likelihood of a specific behavior is increased through the use of a reward following the desired behavior.

Empirical

Empirical refers to information acquired by observation or experimentation, basing knowledge on empirical evidence is foundational in science.

Sociohistorical Context

Sociohistorical context refers to how societal and historical factors influence and shape behaviors, events, and perceptions.