Question

In comparing two investment alternatives, the difference between the net present values of the two alternatives obtained using the total-cost approach will be:

Answer 1

the same as using the incremental cost approach

Step-by-step explanation:

There are two approaches to compare rival investment proposals using the net present value method (npv comparison). The total cost method as well as the incremental cost strategy are two different approaches. The total cost method has the distinct benefit of allowing an unlimited number of choices to be evaluated side by side to find the optimal course of conduct.