Question: Why is the net present value method generally preferred over the internal rate of return method?

Why is the net present value method generally preferred over the internal rate of return method?

Step by Step Solution

★★★★★

3.51 Rating (158 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The NPV method is generally preferred over the internal rate of ret... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

407-B-M-A-C-B-D (699).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Q:

Why is the net present value method of investment appraisal considered to be theoretically superior to other methods that are found in practice?

Q:

Why does the net present value method favor larger projects over smaller ones when used to choose between mutually exclusive projects? Is this a problem?

Q:

Why are net present value and internal rate of return considered discounted cash flow methods?

Q:

When a project has uneven projected cash inflows over its life, a management accountant (as we did in class) may be forced to use ___________________ (with the net present value method) to find the...

Q:

1.Explain the differences between managerial accounting and financial accounting. 2.Identify the different types of product and non-production costs and give examples for each. 3.Define and graph...

Q:

Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 24% each of the last three...

Q:

pls help Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 23% each of the last...

Q:

Hi there, I'm struggling on these questions, can someone help me out please! :) I would really appreciate it. Required: 1. What is the project's net present value? 2. What is the project's internal...

Q:

Aqua Tech is considering investing in a new testing device. It has two options: Option A would have an initial lower cost but would require a significant expenditure for rebuilding after 5 year....

Q:

Chapter 14 Assignment 6 18 Casey Nelson is a divisional manager for Pigeon Company His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 23%...

Q:

It requires 17.10 kJ to melt 1.00 102 g of urethane [CO2 (NH2)C2H5] at 48.7C. What is the latent heat of fusion of urethane in kJ/mol?

Q:

Find the concentrations of Ag+(aq), NH3(aq), and [Ag(NH3)2]+(aq) at equilibrium when 0.10 mol Ag+(aq) and 0.10 mol NH3(aq) are made up to 1.00 L of solution. The dissociation constant, Kd, for the...

Q:

Define market value. How do you differentiate it from intrinsic value?

Q:

What should Tammy do as a long-range solution to the problem of men trying to convert business occasions into social occasions, when she wants to keep them as business occasions?

Q:

What is the major shortcoming of using income from operations as a performance measure for investment centers?

Q:

In a decentralized company in which the divisions are organized as investment centers, how could a division be considered the least profitable even though it earned the largest amount of income from...

Q:

How does using the rate of return on investment facilitate comparability between divisions of decentralized companies?

Q:

Discuss the reasons and situations in which researchers would want to use linear regression. How would a researcher know whether linear regression would be the appropriate statistical technique to...

Q:

Sean Ay B dos sucesos tales que: \f\fAVB)\f\f\f

Q:

Time Series Analysis is a set of advanced statistical techniques used for data gathered on a specific characteristic over a period of time . Time series data are used in business to examine patterns,...