An Advantage of the NPV Method Is That

question 5

Multiple Choice

An advantage of the NPV method is that:

• A) it relies on the use of an appropriate discount factor for the circumstances.
• B) optimum outcomes are achieved simply by ranking projects according to their NPVs.
• C) only cash flows are taken into account, so it is not affected by changes to accounting rules and standards.
• D) all of the options are advantages of the NPV method.

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