Question

Question text Which of the following statements is CORRECT? Select one: a. The discounted payback method...

Question text Which of the following statements is CORRECT? Select one: a. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. b. The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. c. The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. d. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. e. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
Question text Which of the following statements is CORRECT? Select one: a. The discounted payback method...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally...

    Which of the following statements is CORRECT? The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects. The net present value method (NPV) is generally regarded by academics...

  • Which of the following statements is CORRECT? One reason some people prefer the MIRR to the...

    Which of the following statements is CORRECT? One reason some people prefer the MIRR to the regular IRR is that the MIRR is based on a generally more reasonable reinvestment rate assumption. A project’s MIRR can never exceed its IRR. When evaluating mutually exclusive projects, the modified IRR (MIRR) always leads to the same capital budgeting decisions as the NPV method, regardless of the relative lives or sizes of the projects being evaluated. Both the regular and the modified IRR...

  • Which of the following statements is correct? A project's discounted payback period (DBP) is normally shorter...

    Which of the following statements is correct? A project's discounted payback period (DBP) is normally shorter than its traditional payback period (PB) because DPB accounts for the time value of money, whereas PB does not. To compute the NPV for a project, the firm's required rate of return must be known. To compute a project's internal rate of return (IRR), the firm's required rate of return is not used because the IRR is the discount rate where the project's NPV...

  • Which of the following statements is CORRECT? A) The NPV method is regarded by most academics...

    Which of the following statements is CORRECT? A) The NPV method is regarded by most academics as being the best indicator of a project's profitability, hence most academics recommend that firms use only this one method and disregard other methods. B) The NPV method was once the favorite of academics and business executives, but today most authorities regard the MIRR as being the best indicator of a project's profitability. C) A project's NPV depends on the total amount of cash...

  • Which of the following statements is most correct? a. The IRR method is correct under all...

    Which of the following statements is most correct? a. The IRR method is correct under all circumstances when comparing mutually exclusive projects. b. The discounted payback method solves all the problems associated with the payback method. c. For independent projects, the decision to accept or reject will always be the same using either the MIRR method or the NPV method. d. All of the statements above are correct.

  • Which of the following statements is most correct?             a. The IRR method is correct under all...

    Which of the following statements is most correct?             a. The IRR method is correct under all circumstances when comparing mutually exclusive projects.             b. The discounted payback method solves all the problems associated with the payback method.             c. For independent projects, the decision to accept or reject will always be the same using either the MIRR method or the NPV method.             d. All of the statements above are correct.

  • Which of the following statements is INCORRECT? Select one: a. For independent projects, the decision to...

    Which of the following statements is INCORRECT? Select one: a. For independent projects, the decision to accept or reject will always be the same using either the MIRR method or the NPV method. b. The IRR method is appealing to some managers because it produces a rate of return upon which to base decisions rather than a dollar amount like the NPV method. c. One of the disadvantages of choosing between mutually exclusive projects on the basis of discounted payback...

  • Which of the followin is correct? A. Because discounted payback takes account of the required rate...

    Which of the followin is correct? A. Because discounted payback takes account of the required rate of return, a projects discounted payback is normally shorter than its regular payback. B. The npv and irr methods use the same basic equation, but in the npv method the discount rate is specified and the equation is solved for npv, while in the irr method the npv is set equal zero and the discount rate is found. C. If the required rate of...

  • The overall “best” capital budgeting decision method to use is: a. Payback Period b. Discounted Payback...

    The overall “best” capital budgeting decision method to use is: a. Payback Period b. Discounted Payback Period c. Net Present Value d. Internal Rate of Return

  • KEY TERMS Define the following terms: a. Capital budgeting; strategic business plan b. Net present value...

    KEY TERMS Define the following terms: a. Capital budgeting; strategic business plan b. Net present value (NPV) c. Internal rate of return (IRR) d. NPV profile; crossover rate e. Mutually exclusive projects; independent projects f. Nonnormal cash flows; normal cash flows; multiple IRRS g. Modified internal rate of return (MIRR) h. Payback period; discounted payback CAPITAL BUDGETING CRITERIA You must analyze two projects, X and Y. Each project costs $10,000, and the firm's WACC is 12%. The expected cash flows...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT