Which method provides more confidence, the payback method or the net present value method? A) Payback...
Which method provides more confidence, the payback
method or the net present value method?
A) Payback because it provides a good timetable.
B) Payback because it tells you when you break even.
C) Net present value because it considers all inflows and
outflows and the time value of money.
D) Net present value because it does not need to use cost of
capital.
Homework Answers
Option C is correct.
In Finance Time of Value of Money is a thing to be considered while making financial decisions. So, Net Present value is a better method because it considers all inflows and outflows and the time value of money.
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