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

Partial correlation coefficients , In multiple correlation equations we are...

In multiple correlation equations we are often interested in finding out how much of the variation in the dependent variable is explained by one independent variable if all the oth

When are the financial crises occurred, When are the financial crises occur...

When are the financial crises occurred? Financial crises arise where there is a large raise in asymmetric information into financial markets. Asymmetric information arises whil

A/a2, A/A2 is generally the second- or third-highest rating that a rating a...

A/A2 is generally the second- or third-highest rating that a rating agency gives to a security or carrier. This rating indicates that there is a comparatively low risk of default a

Discuss the objectives of financial statements, Question: The Statement...

Question: The Statement of Principles for Financial Reporting sets out the principles that should underlie the preparation and presentation of general-purpose financial stateme

Describes the techniques of work breakdown structure, Due to the complexity...

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Price of equity shares, please give us the formula of price of equity share...

please give us the formula of price of equity shares of walter''s and gordon''s model

How does it help financial managers make business decisions, What is the in...

What is the investment opportunity schedule (IOS)?  How does it help financial managers make business decisions? The investment opportunity schedule illustrates graphically pro

Present value, Present V alue This is the current value of a fu...

Present V alue This is the current value of a future payment or stream of payments. The present value is calculated by applying a discount (capitalization) rate to the

Derivatives, Derivatives - Financial instruments whose value varies with va...

Derivatives - Financial instruments whose value varies with value of an underlying asset (like a stock, BOND, commodity or currency) or index like interest rates. Financial instrum

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