📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      Among various capital budgeting and investment appraisal methods, the Net Present Value (NP

      • V method is often considered superior primarily because it explicitly accounts for which of the following factors?
      A Total sales revenue Correct Answer Incorrect Answer
      B Time value of money and cash flow timing Correct Answer Incorrect Answer
      C Accounting profits without discounting Correct Answer Incorrect Answer
      D Immediate payback of investments Correct Answer Incorrect Answer
      E Profitability as a simple ratio Correct Answer Incorrect Answer

      Solution

      NPV considers the time value of money by discounting future cash flows to their present value. This gives a more accurate measure of a project's profitability compared to methods like payback period or accounting rate of return.

      Practice Next
      More Previous year papers Questions

      Relevant for Exams:

      ask-question