The evidence of many recent studies suggests that there are major differences between current theories of investment appraisal and the methods which firms actually use in evaluating long-term investments.
You are required to:
(a) Present theoretical arguments for the choice of net present value as the best method of investment appraisal;
(b) Explain why in practice other methods of evaluating investment projects have proved to be more popular with decision-makers than the net present value method.