COST ACCOUNTING
CAPITAL BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following criterion is often preferred
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A) Net present value
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(B) Profitability index
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C) Internal Rate of Return
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D) All of the above
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Explanation:
Detailed explanation-1: -NPV is preferred when measuring cash flow over a long period of time.
Detailed explanation-2: -Project success criteria (PSC) Delivered within Time and Budget tolerances. Delivered to Specifications. Customer Satisfaction rating achieved. Health and Safety adherence.
Detailed explanation-3: -The correct answer is option (a). A project is accepted if, Net present value of the project is positive.
Detailed explanation-4: -Answer: The projects with lower payback period are preferred.
There is 1 question to complete.