Question
What is one disadvantage of NPV as a capital budget method? It can be misleading if inputs like cash flow turn out to be wrong.
What is one disadvantage of NPV as a capital budget method?
- It can be misleading if inputs like cash flow turn out to be wrong.
- It does not deliver an overall picture of the gain or loss of implementing a project.
- It is rarely used, so there is disagreement as to what an adequate NPV is.
- It cannot be used to compare investments with different upfront costs.
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Fundamentals of Financial Accounting
Authors: Fred Phillips, Robert Libby, Patricia Libby
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78025915, 978-1259115400, 1259115402, 978-0078025914
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