a. The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
b. The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
c. The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
d. The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
e. The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.
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Expert's answer
2012-02-09T08:34:20-0500
The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects is CORRECT statement. Other methods have some defects, for instance, the internal rate of return method (IRR) assumes that the cash flows to be received from a project can be reinvested at the IRR itself, and that assumption is often not valid. The payback method has come under criticism for its inability to consider all the project's flows in a present valued context.
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