acct6 494392

Problem 1 Required: In the space below, describe the net present value method of capital budgeting. The net present value method of capital budgeting is the present value of the cash inflows minus the present value of the cash outflows by using a minimum acceptable rate of return on a capital investment project known as the hurdle rate . In layman terms this means common way of expressing this is to say that the net present value (NPV) is the present value of the benefits (PVB) minus the present value of the costs (PV). Since, net present value uses discounted cash flows in the analysis which makes net present value the most correct of any of the capital budgeting method as it considers both the risk and time variables ????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????