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1 FINANCE MCQS

Net Present Value (NPV), Profitability Index (PI), Payback, and Discounted Payback are methods used to ____________?

  • Evaluate cash flow
  • Evaluate projects
  • Evaluate budgeting
  • Evaluate equity
Correct Answer: B. Evaluate projects

Detailed Explanation

Net Present Value (NPV), Profitability Index (PI), Payback, and Discounted Payback are capital budgeting techniques used to evaluate and compare investment projects. These methods help businesses decide which projects should be undertaken by analyzing profitability, cash inflows, and payback period. They are essential for efficient capital allocation and long-term financial planning.

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