Question
The net present value method is considered the most theoretically correct decision criteria because of all the following EXCEPT: 1- it allows the comparison of
The net present value method is considered the most theoretically correct decision criteria because of all the following EXCEPT:
1- it allows the comparison of benefits and costs of a project's estimated cash flows in a logical manner through the use of time value of money principles
2- It requires a detailed forecast of a project's future expected cash flows (e. benefits and costs) .
3- It assumes all intermittent cash flows can be reinvested at the firm's cost of capital, which is a more realistic reinvestment assumption than a project IRR
4-it provides the dollar amount by which positive (negative) NPV projects will increase (decrease) the value of the firm which is consistent with the goal of shareholder wealth maximization
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Managerial Accounting
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
2nd edition
9780077493677, 78025516, 77493672, 9780077826482, 978-0078025518
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