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Net Present Value

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"Smart analysts can massage the numbers in NPV analysis to make any project's NPV look positive. It is better to use a simpler approach, such as payback, that gives analysts fewer degrees of freedom to manipulate the numbers." Respond to this comment.

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The expert examines the new present value for smart analysis.

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NET PRESENT VALUE AND PAYBACK PERIOD: CAPITAL BUDGETING TOOLS

"Smart analysts can massage the numbers in NPV analysis to make any project's NPV look positive. It is better to use a simpler approach, such as payback, that gives analysts fewer degrees of freedom to manipulate the numbers."

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The net present value method depends much on the estimates of future cash flows for a project. The financial analyst will make use of ...

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