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

What is non - diversifiable risk, What is nondiversifiable risk? How is it ...

What is nondiversifiable risk? How is it measured? If not the returns of one-half the assets in a portfolio are perfectly negatively correlated along with the other half-which

Draw a diagram illustrating a straddle, Prices of Calls and Puts Options th...

Prices of Calls and Puts Options the shares of Marks & Spencer a) Explain carefully why the November calls are trading at higher prices than the September calls. b) Draw

Expansion financing, The securing of the working capital needed for the sup...

The securing of the working capital needed for the support of raises in accounts receivable and inventory related with an organizations initial expansion time.

Active portfolio strategy, Active Portfolio Strategy: An active portfo...

Active Portfolio Strategy: An active portfolio strategy is tracked by most aggressive investors and investment professionals who strive to make superior returns, after adjustm

What is over capitalization, Question 1 What is over capitalization? How d...

Question 1 What is over capitalization? How do we know over capitalization has occurred? Question 2 Explain permanent and temporary working capital Question 3 A. What ar

What are the options available for growth, What are the options available f...

What are the options available for growth Joint venture   A joint venture is when a separate company is formed, in which every member holds an equity st

Calculate the required return - maintenance & other expense , An asset need...

An asset needed by the ABC Corp. can be purchased for $100,000.  Maintenance and other ownership expenses will total $20,000 each year for the asset's expected 10-year life. On the

Offshore pension funds, (b) What are the possible advantages of an offshore...

(b) What are the possible advantages of an offshore pension fund?

Marginal weighting system, uses and limitations of the marginal weighting s...

uses and limitations of the marginal weighting system

Determine the post-merger eps and post-mergershare price, Post-merger EPS a...

Post-merger EPS and post-mergershare price An estimated post-merger EPS can be calculated by: (Combined earnings) / total shares after merger An estimated post-merger 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