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Assume in analyzing alternative proposals that Proposal F has a useful life of 6 years and Proposal J has a useful life of 9 years. What is one widely used method to make the net present values of the proposals comparable

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Answer:

The one widely used method to make the net present values of Proposal F with a useful life of 6 years and Proposal J with a useful life of 9 years comparable is:

the NPV method.

Step-by-step explanation:

Used in capital budgeting and investment planning, the Net Present Value (NPV) method discounts project F's and project J's future cash flows to their present values. The NPV method can be used to establish that some projects and investments are more profitable than others. The method can also indicate that the present dollar projected earnings generated by a project or an investment exceed the anticipated present dollar costs.

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User Chris Ruppel
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