question archive The net present value method is considered the most theoretically correct decision criteria because of all the following EXCEPT It allows the comparison of benefits and costs of a project's estimated cash flows in a logical manner through the use of time value of money principles it requires a detailed forecast of a project's future expected cash flows (ie, benefits and costs) it assumes all intermittent cash flows can be reinvested at the firm's cost of capital, which is a more realistic reinvestment assumption than a projects IRR
The net present value method is considered the most theoretically correct decision criteria because of all the following EXCEPT It allows the comparison of benefits and costs of a project's estimated cash flows in a logical manner through the use of time value of money principles it requires a detailed forecast of a project's future expected cash flows (ie, benefits and costs) it assumes all intermittent cash flows can be reinvested at the firm's cost of capital, which is a more realistic reinvestment assumption than a projects IRR
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The net present value method is considered the most theoretically correct decision criteria because of all the following EXCEPT
It allows the comparison of benefits and costs of a project's estimated cash flows in a logical manner through the use of time value of money principles
it requires a detailed forecast of a project's future expected cash flows (ie, benefits and costs)
it assumes all intermittent cash flows can be reinvested at the firm's cost of capital, which is a more realistic reinvestment assumption than a projects IRR.
it provides the dollar amount by which positive (negative) NPV projects will increase (decrease) the value of the firm which is consistent with the goal of shareholder wealth maximization.
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Answer:
The Correct answer is 2nd statement
Net present value is the present value of future cash flows that the project is going to generate over time less initial investment, This method assumes that the cash flows are reinvested at the cost of capital and it shows the dollar amount by which the value of firm will increase.
