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Why is the NPV approach often regarded to be superior to the IRR method?
Why is the NPV approach often regarded to be superior to the IRR method?
Why is the NPV method superior to payback method?
How is the method superior to the payback method
Why is the NPV method superior to the Payback method?
How is the method superior to the payback method
Does lower WACC equal lower NPV?
no it increases npv
What happens to NPV when cost of capital increased?
NPV decreases when the cost of capital is increased.
The NPV assumes cash flows are reinvested at the?
The NPV assumes cash flows are reinvested at the: A. real rate of return B. IRR C. cost of capital D. NPV
Why is the NPV superior to ARR and PB?
Net present value (NPV) is superior to accounting rate of return (ARR) and payback period (PB) because it takes into account the time value of money by discounting future cash flows back to the present. ARR does not consider the time value of money and only focuses on accounting profits. PB only considers the time it takes to recoup the initial investment without considering the profitability of the investment over its entire lifespan.
The weighted scoring approach avoid the drawbacks of the NPV approach?
The weighted scoring approach avoid the drawbacks of the NPV approach?
Does the npv of future cash flows increase or decrease as the discount rate increases?
NPV decreases with increasing discount rates.
IRR VS NPV?
IRR: Internal rate return NPV: Net present value Both are measure of the viability of a project(s) You can have multiple IRR (because of discontinued cash flows) but you always have one NPV.
What is sociocentrism and ethnocentrism?
Sociocentrism is the act of regarding one's own social group as superior to others. Ethnocentrism is the act of regarding one's own ethnic group as superior to others.
What happens to NPV if the cost of capital changes?
The cost of capital is inversely proportional to the NPV. As capital costs increase (i.e. the interest rate increases), NPV decreases. As capital costs decrease (i.e. the interest rate decreases), NPV increases. You can see the relationship in the following equation: NPV = a * ((1+r)^y - 1)/(r * (1+r)^y) Where: NPV = Net Present Value (The present value of a future amount, before interest earnings/charges) a = Amount received per year y = Number of years r = Present rate of return
