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.

---

Definitions:

Government

The governing body of a nation, state, or community, responsible for creating and enforcing laws and managing public services and resources.

Wagner Act

Also known as the National Labor Relations Act, it's a foundational statute of US labor law which guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Employer

An individual or organization that hires and pays people to perform work or provide services.

Union Representative

An individual elected or appointed to represent union members in discussions, negotiations, or disputes with the employer.