Question
Which of the following statements about capital investment analysis is most correct? 1. Although a useful accounting concept, breakeven analysis has no role in capital
Which of the following statements about capital investment analysis is most correct? 1. Although a useful accounting concept, breakeven analysis has no role in capital investment analysis. 2. Net present value (NPV) measures a projects rate of return, whereas internal rate of return (IRR) measures a projects dollar return. 3. An NPV of zero indicates that the project is expected to return the amount of the initial investment, but it will not provide a return on that investment. 4. On most projects, the NPV and IRR measures will give conflicting results, so managers must use judgment as to which measure to use. 5. Payback measures the length of time it takes to recover the initial investment in the project.
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