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Question 4 - CBDA discussion

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Based on the financial analysis that's been completed by the analytics team, the business analysis professional reminds the team that the most financially feasible option is the one with the:

A.
Highest ROI, highest present value, lowest NPV and highest payback period
Answers
A.
Highest ROI, highest present value, lowest NPV and highest payback period
B.
Highest ROI, highest present value, highest NPV, and lowest payback period
Answers
B.
Highest ROI, highest present value, highest NPV, and lowest payback period
C.
Highest ROI, lowest present value, lowest NPV and highest payback period
Answers
C.
Highest ROI, lowest present value, lowest NPV and highest payback period
D.
Highest ROI, lowest present value, highest NPV and lowest payback period
Answers
D.
Highest ROI, lowest present value, highest NPV and lowest payback period
Suggested answer: B

Explanation:

The most financially feasible option is the one that maximizes the return on investment (ROI), the present value (PV), and the net present value (NPV), and minimizes the payback period. ROI measures the annual percentage return of an investment, PV measures the current value of future cash flows, NPV measures the difference between the PV and the initial cost of an investment, and payback period measures the time it takes to recover the initial cost of an investment. A higher ROI, PV, and NPV indicate a more profitable and valuable investment, while a lower payback period indicates a faster recovery and lower risk of an investment

asked 18/09/2024
Moraes, Jefferson
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