Respuesta :
Net Present Value is the capital budgeting techniques discussed, which works equally well with normal and non-normal cash flows and with independent and mutually exclusive projects.
What is Net Present Value ?
The net present value (NPV) It is calculated by adding the present value of all cash inflows and subtracting the present value of all cash outflows. Method of evaluating investments adds the present value of all cash inflows and subtracts the present value of all cash outflows.
In net present value, the present value of all yearly cash inflows should be subtracted to the present value of the cash outflows.
Net present value = Present value of yearly cash inflows - Present value of yearly cash outflows or initial investment.
If the Net Present value is positive, then the project should be accepted otherwise rejected.
Therefore, we can conclude that the correct option is D.
Your question is incomplete, but most probably your full question was:
Of the capital budgeting techniques discussed, which works equally well with normal and non-normal cash flows and with independent and mutually exclusive project?
A. payback period
B. discounted payback period
C. modified internal rate of return
D.net present value
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