Theoretically, the NPV Is the Most Appropriate Method to Determine

question 78

Multiple Choice

Theoretically, the NPV is the most appropriate method to determine the acceptability of a project.A false sense of security can overcome the decision-maker when the procedure is applied properly but the positive NPV results are accepted blindly.Sensitivity and scenario analysis aid in the process by:

• A)changing the underlying assumptions on which the decision is based.
• B)highlights the areas where more and better data are needed.
• C)providing a picture of how an event can affect the calculations.
• D)All of the above.
• E)None of the above.

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Definitions:

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