18. Static methods of evaluation of the effectiveness of
investments primarily focused on:
Answer : A & B
A.nature of static evaluation methods of the effectiveness of
investments
- Static methods not considering time value money like dynamic
methods but they are used for their simplicity and ready methods
for dealing with the risk associated with investment.
B. benefits of using static methods of investment evaluation and
their limitations - characteristics of ROI indicator and payback
period of investments
- Static methods has its own strenghts & Weaknesses for
evaluating effectiveness of the investment, like it is simple both
in concept & application but not using time value money factor,
so one can choose the method which best fit the requirements.
19. Dynamic methods of evaluation of the effectiveness of
investments primarily focused on:
Answer: A & B
A. nature of dynamic methods of investment evaluation and input
parameters that are used
- The basic difference between Dynamic Method & Static Method
is Time Value money, so dynamic methods like NPV, IRR using time
value money factor.
B.strengths and weaknesses of dynamic methods of investment
evaluation
- Each dyanamic methods for evaluating effectiveness of the
investment has its own strenghts & Weaknesses, so one can
choose the method which best fit the requirements.