Which of the following is true? A. Discounted cash flow analysis is the least precise of the cash flow techniques, because it does not consider the time value of money. B. NPV is the least precise of the cash flow analysis techniques, because it assumes reinvestment at the discount rate. C. Payback period is the least precise of the cash flow analysis techniques, because it does not consider the time value of money. D. IRR is the least precise of the cash flow analysis techniques, because it assumes reinvestment at the cost of capital.

Which of the following is true? 

A. Discounted cash flow analysis is the least precise of the cash flow techniques, because 

it does not consider the time value of money.

B. NPV is the least precise of the cash flow analysis techniques, because it assumes 

reinvestment at the discount rate.

C. Payback period is the least precise of the cash flow analysis techniques, because it 

does not consider the time value of money.

D. IRR is the least precise of the cash flow analysis techniques, because it assumes 

reinvestment at the cost of capital.
by

1 Answer

Answer :

C. Payback period is the least precise of the cash flow analysis techniques, because it 

does not consider the time value of money.
by

Related questions

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Last Answer : D. IRR is the discount rate when NPV is equal to zero.

When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

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Last Answer : B. net present value (NPV)

When operating under a single-period capital-rationing constraint, you may first want to try selecting projects by descending order of their in order to give yourself the best chance to select the mix of projects that adds most to firm value. A. profitability index (PI) B. net present value (NPV) C. internal rate of return (IRR) D. payback period (PBP)

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A project has a Profitability Index of 1.30. What does it mean? A.The NPV is less than zero B.The payback period is more than one year C.That the project returns Rs 1.30 for every Re 1 invested in the project D.That IRR is 1.30 times that of the Hurdle Rate

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Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with mutually exclusive projects, capital rationing, or unusual projects having multiple sign changes in the cash-flow stream, the internal rate of return method can be used with reasonable confidence. C. The internal rate of return does not consider the time value of money. D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated

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A firm is about to undertake a project and has compu10% 130 15% 50 20% -50 What is the approximate IRR of this project? A 20% B 17.5% C 15% D 22.5%ted the NPV of the project using a variety of discount rates: Discount Rate used NPV

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