Demerits of net present value method, Financial Management

Assignment Help:

Q. Demerits of net present value method?

(i) Difficult to Understand as well as Implement:- This method is tricky to understand as well as implement in comparison to the payback and the ARR method.

(ii) Complexity in fixing the required rate of return: - Required rate or else discount rate are the most important in calculating the NPV for the reason that different discount rates will give different present values.

(iii)In case of two projects with irregular initial investment this method mayn't give satisfactory result.

(iv) In case of two projects with dissimilar lives this method may not give satisfactory result.


Related Discussions:- Demerits of net present value method

Determination of spread, Determination of spread Daily interest rate = ...

Determination of spread Daily interest rate = 5.11/ 365 = 0.014% per day Variance of cash flows = 1000 × 1000 = $1000000 per day Transaction cost = $18 per transaction

Criticism of wealth maximization, Q. Criticism of Wealth Maximization? ...

Q. Criticism of Wealth Maximization? i) The objective of wealth maximization is not, necessarily, socially desirable. ii) There is some controversy whether the objective of

Cash flows vs accounting profits, Do you provide assignment help on Cash Fl...

Do you provide assignment help on Cash Flows Vs Accounting Profits. Do you have experts in this topic? Please suggest me if you can give me help with this topic.

Constructing synthetic swaps, (a) Prior to FAS 133 if companies qualified ...

(a) Prior to FAS 133 if companies qualified for hedge accounting their hedges were assumed to be perfect-no valuation or testing required. Currently under FAS 133 risk managers se

Role of market efficiency, Role of market efficiency: Market efficiency...

Role of market efficiency: Market efficiency signifies how ‘quickly and accurately' does relevant information have its effect on the asset prices. Depending upon the degree of

Em.pirical finanse, give me your email then i will send it to you

give me your email then i will send it to you

International financial management - a European perspective , To whom it ma...

To whom it may concern, I wanna someone to help me to get prepared for my exam. is it possible to work together? 1. Managerial Aspects of the Market for Foreign Exchange

Cost of capital, The Nu-Nu Brothers Inc. (NNBI) has the following capital s...

The Nu-Nu Brothers Inc. (NNBI) has the following capital structure, which it considers to be optional: Debt 25% Preferred Stock 15% Common Equity 60% NNBI''''s expected net income

What are the weaknesses of the traditional approach, What are the Weaknesse...

What are the Weaknesses of the traditional approach The traditional approach to the scope of finance function evolved during 1920s and 1930s and dominated academic during 40's

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