B is corrent. The net present value method accommodates the requirement but the payback method does not. The net present value method determines the present value of all future cash flows at a selected discount rate. If the NPV of the cash flows is positive, the return earned by the project is higher than the selected rate. The payback method simply evaluates investments based on the number of years required to recover the initial investment.
A is incorrect. The net present value method accommodates the requirement but the payback method does not. The net present value method determines the present value of all future cash flows at a selected discount rate. If the NPV of the cash flows is positive, the return earned by the project is higher than the selected rate. The payback method simply evaluates investments based on the number of years required to recover the initial investment.
A is incorrect. The net present value method accommodates the requirement but the payback method does not. The net present value method determines the present value of all future cash flows at a selected discount rate. If the NPV of the cash flows is positive, the return earned by the project is higher than the selected rate. The payback method simply evaluates investments based on the number of years required to recover the initial investment.
D is incorrect. The net present value method accommodates the requirement but the payback method does not. The net present value method determines the present value of all future cash flows at a selected discount rate. If the NPV of the cash flows is positive, the return earned by the project is higher than the selected rate. The payback method simply evaluates investments based on the number of years required to recover the initial investment
