Multiple Choice
Given that the net present value (NPV) is generally considered to be the best method of analysis, why should you still use the other methods?
A) The other methods help validate whether or not the results from the net present value analysis are reliable.
B) You need to use the other methods since conventional practice dictates that you only accept projects after you have generated three accept indicators.
C) You need to use other methods because the net present value method is unreliable when a project has unconventional cash flows.
D) The average accounting return must always indicate acceptance since this is the best method from a financial perspective.
E) The discounted payback method must always be computed to determine if a project returns a positive cash flow since NPV does not measure this aspect of a project.
Correct Answer:

Verified
Correct Answer:
Verified
Q102: AAR is biased in favour of liquid
Q117: A project which has a discounted payback
Q177: A project will produce cash inflows of
Q178: You are considering two mutually exclusive projects
Q180: If a project with conventional cash flows
Q181: The discounted payback rule can be best
Q183: An investment's average net income divided by
Q184: Ranking conflicts can arise if one relies
Q185: You are considering an investment which has
Q186: Without using formulas, provide a definition of