Question 6.ST.5: List the advantages of the net present value investment appr...

The advantages of the net present value method of investment appraisal are that it:
– takes account of the time value of money;
– takes account of the amount and timing of cash flows;
– uses cash flows rather than accounting profit;
– takes account of all relevant cash flows over the life of the project;
– can take account of both conventional and non-conventional cash flows;
– can take account of changes in discount rate during the life of the project;
– gives an absolute rather than a relative measure of the desirability of the project;
– can be used to compare all investment projects.