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a) An analyst argues that the Net Present Value and

a) An analyst argues that the Net Present Value and the Net Benefit-Cost Ratio are equally reliable in deciding whether

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Question:

a) An analyst argues that the Net Present Value and the Net Benefit-Cost Ratio are equally reliable in deciding whether a project should be implemented or not; and that they are also equally reliable in selecting between projects. Mention whether you agree with both statements of the analyst or not. Explain your answer.

b) An analyst argues that when assessing the viability of a project, a Net Benefit Cost (B/C) Ratio greater than one means that the NPV of the project is positive and so the B/C ratio is a reliable criterion for deciding whether to accept a project or not. Do you agree with the analyst? Explain.

c) An analyst argues that the internal rate of return (IRR) is an unreliable criterion for selecting among projects even if the net cash flows of all the projects have unique IRRs. Do you agree with the analyst? Explain your answer.