Question

When different investment rules give conflicting answers, then decision should be based on the Net Present Value rule, as it is the most reliable and accurate decision rule. True or False

Answer 1

Answer:

True

Explanation:

At times of conflicting investment proposals, the Net Present Value (NPV) serves as an ideal way to make decisions. It keeps a proper check of all the possibilities before reaching a proper conclusion.

New Present Value refers to the cash flow at different interval of time. It provides for a method to calculate and compare cash that has been used at different time in loans, payments, and investments to show the real value of money.