alleryStart learning →With unlimited funds and independent projects, a firm should accept
Athose with top payback
Bthose with top book profit
Conly the single largest
Dthose with positive NPV
Answer & Solution
Correct answer: D. those with positive NPV
Every positive NPV project adds value to shareholders, so all of them are accepted when funds are not limited.
Keep practising Capital Budgeting
Browse all Capital Budgeting questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
R&D managers can use real options valuation to handle uncertainty whenA benefit of NPV for a firm with several projects is that NPVs areNPV accuracy relies heavily on the chosenSensitivity analysis studies how uncertainty in a model's output relates to itsAdjusted present value equals equity-financed NPV plus theA Rs 50,000 cash flow in a year has 60% probability; discount rate 10%. Risk-adjusted PV irNPV is the standard valuation method in which industry?Risk-adjusted NPV multiplies each cash flow by the