The Primary Problem with the NPV Technique of Capital Budgeting

question 51

Multiple Choice

The primary problem with the NPV technique of capital budgeting is:

• A) that many people without a background in financial theory may not understand it.
• B) that there is no adjustments for risk.
• C) an unclear decision rule.
• D) the fact that it ignores the time value of money.
• E) that it uses unorthodox time value of money techniques.

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Definitions:

White Teeth

Refers to teeth that appear very light in color, often considered desirable in many cultures for cosmetic reasons.

Explanandum

The aspect of a phenomenon that is being explained, or the question that an explanation seeks to answer.

Complex

Consisting of many different and connected parts.

Simple

Easily understood or done; presenting no difficulty, or in logic, referring to an uncompounded statement or idea.