Response to Comments Essay Example | Topics and Well Written Essays - 250 words

Response to Comments - Essay ExampleAll accountants and financial analysts actualize that money losses value over time due to inflation. Back in the 1960s the money these people had was worth twice as a great deal as todays money because our elders had greater buying power due to the fact money had not depreciated like it has in today economy. DQ2 When a company is using the NVP value method a firm should only accept a project if the project has a NPV above cero. In your answer I believe you mentioned that a company could do badly irrelevant of the NPV being above cero. Well this could happen because the NPV compendium is limited to the project that the analysis is evaluating. If a firm has financial troubles that existed irrelevant of the results associated with the NPV of a project then a firm could go down under. The NPV analysis is not a cocksucker that can be use to evaluate the overall standing of a firm. The scope of an NPV analysis is limited to the scope of the project that the financial tool is used for (Besley & Brigham, 2000). The NPV tool can help managers determine the viability of a capital project. References Besley, S., Brigham, E. (2000). Essential of Managerial Finance (12th ed.). Fort Forth The Dryden Press.