As per (Akers, n. d.) one of the main disadvantages of net present value analysis is that it cannot be always 100 percent accurate due to the estimation that the management needs to have in terms of dollar amount of the projects’ costs and the future income of that project or investment which in the most cases difficult to estimate an accurate figures. Adding to that, any project will always incur some of unforeseen costs and risks which will definitely impact the profitability in a negative way, thus, including the non-quantitative factors is always advisable in such analysis to cover such gaps and to justify the inaccurate figures by emphasizing on intangible benefits to the organization such as the customer satisfaction and improving their quality standards. However, is there any other disadvantages you may think of in regards to depend solely on NPV analysis in projects’ section processes?
Helping bullet points can be :
- Reputation for Quality
- Customer satisfaction
- Scrap Reduction
- Reduced Inventory Needs
You can use your own heading or other point
Please give atleast 500 words in the answer