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:

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in a stable market condition.

Equilibrium Quantity

The amount of products or services available and sought after at the equilibrium price, where the supply meets demand in the marketplace.

Complements

Goods or services that are often used together such that an increase in demand for one leads to an increase in demand for the other.

Equilibrium Price

The cost at which consumer demand for a product matches the amount manufacturers are willing to supply.