Question

Which of the following statements correctly explains Net present value: is the best method of analyzing mutually exclusive projects. is very similar in its methodology to the average accounting return. cannot be applied when comparing mutually exclusive projects. is less useful than the internal rate of return when comparing different-sized projects. is the easiest method of evaluation for nonfinancial managers.

Answer 1

is the best method of analyzing mutually exclusive projects

Step-by-step explanation:

The net present value would be considered the best method of capital budgeting to evaluate projects.

Also, it considers the time value of money. It represent to be a good indicator of firm profitability and rise the shareholder wealth.

So according to the given options, it would be considered the best method for analyzing the projects that are mutually exclusive

hence the first option is correct