) It takes into account the time value of money and thus gives a sound measure of the
viability of a project as it lumps inflows together at their present values.
ii) It considers all the inflows or returns generated by a given venture and as such it will
gauge the company's profitability with more accuracy
iii) It indicates the minimum rate of return at which the company will break even and any
rate above such a rate will yield a return to the company to boost its profitability.
iv) In the absence of cost of capital which is usually the yardstick to gauge the viability of a
venture.
v) Can be used to compare projects of different sizes
NatalieR answered the question on February 9, 2022 at 11:55
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