Merits of net present value method, Financial Management

Assignment Help:

Q. Merits of net present value method?

Merits of NPV method:-

(i) Time value of funds is taken into consideration: - For the reason that this method takes into account the time value of money it is the best method to utilize for long range decisions.

(ii) Entire Life of the project is taken into consideration: - This process takes into account the fall life of the project and not only the payback period.

(iii)Wealth Maximisation: - Wealth maximization objective of the business is achieved by this method. Besides accepting the project with highest NPV the wealth of the business is maximized.


Related Discussions:- Merits of net present value method

Explain adjustments necessary to translate enterprise value, Explain the ad...

Explain the adjustments necessary to translate enterprise value to the total present value of common equity. To acquire the value of the company’s common stock, add the value of

Treasury bills, T-Bills are issued to enable the government to tide o...

T-Bills are issued to enable the government to tide over short-term liquidity requirements with maturities varying from a fortnight to a year. These instruments a

Determining optimum liquid balance, Q. Determining Optimum Liquid Balance? ...

Q. Determining Optimum Liquid Balance? Liquid balance (balance of cash and marketable securities) must be maintained at the optimum level. It is the level which gives the minim

Find out covariance between the two stocks, The stocks of Microsoft and Ap...

The stocks of Microsoft and Apple have a correlation coefficient of 0.6.  The variance of Microsoft stock is 0.4 and the variance of Apple stock is 0.3.  What is the covariance bet

Fin 534 financial management homework solutions to c, Need help with explan...

Need help with explanations for the answers chosen, not good with math calculations, or explaining the answers, can you help with this.Chapters 6, 8

Explain implications of deviations - purchasing power parity, Explain the i...

Explain the implications of the deviations from the purchasing power parity for countries’ competitive positions in the world market. Answer:  If exchange rate changes satisfy pu

Monetary approach to the Exchange Rate, a The Monetary Approach to the ER. ...

a The Monetary Approach to the ER. All else equal, an increase in the interest rate in Canada is associated, in the long run, with higher prices in Canada and an appreciated exchan

Factors affecting choice of a maximum cash balance amount, Explain the fact...

Explain the factors affecting the choice of a maximum cash balance amount. The maximum cash balance amount is regulated by available investment opportunities, the expected payb

Feasibility of the project, From a practical point of view, the feasibility...

From a practical point of view, the feasibility of the project for Maribyrnong Council can be divided into three elements which are: logistical, operational and legal issues. First

Hedge funds, Hedge Funds: Hedge Funds are investment partnerships that ...

Hedge Funds: Hedge Funds are investment partnerships that strive for above average returns through active portfolio management and whose primary compensation is a percentage of

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd