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:

Counter-Resistance

Strategies or behaviors individuals or groups employ to oppose or withstand resistance they encounter.

K Complexes

A type of brain waveform seen in stage 2 sleep, characterized by a brief, high-voltage peak followed by a slow wave; believed to play a role in sleep-based memory consolidation.

Stage 2 Sleep

A phase of sleep characterized by specific brain wave patterns known as sleep spindles and K-complexes, indicating a deeper sleep than stage 1, yet lighter than stages 3 and 4.

Beta Waves

A pattern of brain wave activity that is associated with active, alert consciousness and cognitive processing.