Question: 2 . Select the statement that inaccurately describes the pros and cons of the following financial evaluation metrics : A . Net Present Value (

2. Select the statement that inaccurately describes the pros and cons of the following financial evaluation metrics : A. Net Present Value (NPV )- Pros: Provides a clear dollar amount that reflects the added value from the project , considering the time value of money . Cons : Requires an accurate discount rate to be effective , and it can be difficult to estimate future cash flows accurately , which affects the precision of the calculation . B. Internal Rate of Return ( IRR) Pros: Indicates the expected rate of return of a project , making it easy to compare with required rates of return or other investment opportunities. Can result in multiple values for projects with alternating cash flows , which may lead to best decision -making alternative . C. Payback Period - Pros: Simple and easy to calculate, providing a quick assessment of how soon an investment can be recovered. Cons: Considers the time value of money and fails to measure profitability beyond the payback point. D. Profitability Index - Pros: Useful for comparing projects of different scales by indicating the relative value created per dollar invested. Cons: Like NPV, depends heavily on the accuracy of the discount rate and cash flow projections, and it does not indicate how quickly the investment will be recouped.

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