4. Which one of the following methods determines the amount of the cha

QUESTION

4. Which one of the following methods determines the amount of the change a proposed project will have on the value of a firm?net present valuediscounted paybackinternal rate of returnprofitability indexpayback
Net Present Value and Profitability Index methods would determine the amount of the change a proposed project will have on the value of a firm.Thus, correct answer is Net Present Value and Profitability Index methods The Profitability Inded or PI method compares the present value

of future cash inflows with the initial investment on a relative basis. Therfore, the PI is the ratio of the present value of cash flows (PVCF) to the initial investment of the project.

ANSWER:

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