Which of the following conclusions about capital budgeting are valid? Check all that apply-- ...
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Accounting
Which of the following conclusions about capital budgeting are valid? Check all that apply--
Managers have been slow to adopt the IRR bc percentage returns are a harder concept for them to grasp.
Because NPV is the best project criterion, only it should be used and the other criteria should be ignored.
The discounted payback period improves on the regular payback period by accounting for the time value of money.
Becuase the PI and NPV both focus on value added to shareholder wealth, they always lead to the same accept/reject decision for mutually exclusive projects.
The AAR has more economic significance than the IRR, because it relies upon readily available accounting data.
The NPV is the best project criterion, becuase it shows how much value the company is creating to shareholders.
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