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:

Housing Credits

Housing credits are tax incentives or financial subsidies provided to developers or homeowners to encourage the development or purchase of affordable housing.

Threshold

The minimum level of stimulus or condition required to activate a process or cause a specific effect.

Redistributing Income

The process of realigning the distribution of wealth or income in a society, often through taxation and government spending aimed at reducing inequalities.

Society's Total Utility

The cumulative measure of satisfaction or happiness that a society derives from consuming a particular amount of goods and services.