Mary has just been asked to analyze an investment to determine if it is acceptable. Unfortunately,...

Mary has just been asked to analyze an investment to determine if it is acceptable. Unfortunately, she is not being given sufficient time to analyze the project using various methods. She must select one method of analysis and provide an answer based solely on that method. Which method do you suggest she use in this situation?

		Internal rate of return
		Payback
		Liquidity method
		Net present value
		Profitability index

Expert Solution

Mary should use Net Present Value method in this situation.

If the net present value of a project is positive, it means that the proect will earn profits over the ivestment, if it is neagative it means that the project can not even cover its investment and should be rejected.

jeff jeffy answered 2 years ago

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