On a Purely Theoretical Basis, the NPV Is the Better

question 75

Multiple Choice

On a purely theoretical basis, the NPV is the better approach to capital budgeting due to all the following reasons EXCEPT

• A) that it measures the benefits relative to the amount invested.
• B) for the reasonableness of the reinvestment rate assumption.
• C) that there may be multiple solutions for an IRR computation.
• D) that it maximizes shareholder wealth.

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