Answered: A primary strength of the net present…

A primary strength of the net present value method for analyzing investments is that it accounts for the amount and timing of earnings for that investment. A. True B. False

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2MC

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Question

A primary strength of the net present value method for analyzing investments is that it accounts for the amount and timing of earnings for that investment.

A. True

B. False

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

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