Question: Examine and discuss the characteristics of NPV and the role that this method plays in capital investment decision making. In addition, discuss the advantages of using this method instead of the other evaluation methods such as:
- Accounting rate of return (ARR) and payback period (PP)
- Internal rate of return (IRR)
- Appraisal methods in practice
- Dealing with risk- how managers evaluate the risk involved with projects by using sensitivity analysis and the concept of expected NPV. Managing investment projects.
Please provide a reference to a real company.