Which of the Following Decision Rules Might Best Be Used

question 42

Multiple Choice

Which of the following decision rules might best be used as a supplement to net present value (NPV) by a firm that favors liquidity?

• A) profitability index
• B) MIRR
• C) equivalent annual annuity
• D) payback period

---

Definitions:

Foreclosed Decision

A commitment made to an identity or choice without exploring alternatives, often influenced by external expectations or authorities.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome.

Solutions

Answers or methods for solving a problem or dealing with a challenging situation.

Relativistic Thinking

A cognitive process that recognizes the validity of diverse viewpoints and understands that knowledge and truth can vary depending on context and criteria.