Homework Answers
| Ans. | Option B | |||
| Explanations: Net present value is the best method of capital budgeting to measure | ||||
| the profitability. | ||||
| Net present value = Present value of cash inflows - Initial investment | ||||
| $163,000 - $180,000 | ||||
| -$17,000 | ||||
| *A project with negative net present value should not be accepted because it | ||||
| is the indication of loss in future. | ||||
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