GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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This method can be allied where cash inflows are even
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It takes into account the objective of maximum profitability
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This method considers the entire economic life of the project
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All of these
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Detailed explanation-1: -Calculating NPV considers inflation and helps make judicious decisions. It understands that the cash flow in the future has a lesser value than the cash flow in the present. Calculating this value while accounting for inflation helps businesses compare similar projects and make informed decisions.
Detailed explanation-2: -Advantages of the NPV method The obvious advantage of the net present value method is that it takes into account the basic idea that a future dollar is worth less than a dollar today. In every period, the cash flows are discounted by another period of capital cost.
Detailed explanation-3: -Answer and Explanation: All of the following are advantages of NPV except: C. it recognizes the timing of the benefits resulting from the project. This is not an advantage of NPV due to the fact that NPV results in a single valuation of the project but does not give any feedback as to when the cashflows will come in.