Why is the use of the NPV methods preferred over other methods in deciding what projects to accept? Compare the NPV methods with others, and discuss the advantages and disadvantages of each method.© BrainMass Inc. brainmass.com October 2, 2020, 6:10 am ad1c9bdddf
According to Brigham (2007), Net Present Value (NPV) is a method of ranking investment proposals using the NPV, which is equal to the present value of future net cash flows, discounted at the cost of capital (p.360). Also, De Jonge (2016), explained that NPV is acquired by discounting future cash flows, and the discounting process compounds the interest rate over time.
Comparing the NPV and other Methods
The Net Present Value (NPV) and ...
A Business use Net Present Value (NPV) capital budgeting method to evaluate asset investment projects.