The Advantages of NPV Are All of the Following Except

question 89

Multiple Choice

The advantages of NPV are all of the following except:

• A) it can be used as a rough screening device to eliminate those projects whose returns do not materialize until later years.
• B) it provides the amount by which positive NPV projects will increase the value of the firm.
• C) it allows the comparison of benefits and costs in a logical manner through the use of time value of money principles.
• D) it recognizes the timing of the benefits resulting from the project.

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Definitions:

Effort Justification

A cognitive dissonance resolution strategy where individuals attribute a greater value to an outcome that required a significant effort to achieve.

Court-Ordered Therapy

Therapy mandated by a court of law as part of a sentence or as a condition for probation, typically aimed at rehabilitation.

Minimal Deterrence

A strategy in nuclear policy that advocates for maintaining the smallest possible nuclear arsenal capable of deterring potential adversaries from taking aggressive actions.

Self-Serving Attributional Bias

The common tendency to attribute one's successes to personal characteristics and failures to external factors, aiming to protect self-esteem.