Net Present Value

Multiple Choice

Net present value:

A) cannot be used when deciding between two mutually exclusive projects.
B) is easy to explain to non-financial managers and thus is the primary method of analysis used by the lowest levels of management.
C) is more useful to decision makers than the internal rate of return when comparing different sized projects.
D) is very similar in its methodology to the average accounting return.
E) is not as widely used a tool as payback and discounted payback.