Which of the following capital budgeting methods should be used (and why) when there is...

80.2K

Verified Solution

Question

Finance

Which of the following capital budgeting methods should be used (and why) when there is a conflict in selecting one of two mutually exclusive projects?

Select one:

a.IRR, because executives understand and relate to rates of return.

b.Profitabilty index, because it shows the value returned per dollar.

c.NPV, because it is an absolute measure of value.

d.Discounted payback period, because it directly measures the project's risk.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students