Answer :
Answer:
E. Net present value
Explanation: Net present value is a term used in inventory or asset management to describe to describe the amount of profits that can be achieved by subtracting the cash outflows from the cash inflows.
Net present value can be used to estimate how profitable a capital investment will be in the future if fully implemented, so through the net present value management can effectively decide on what actions to take.
The method that is considered to be the best form of analysis is the net present value.
Net present value
Net present value is the present value of after-tax cash flows from an investment less the amount invested. Only projects with a positive NPV should be accepted and undertaken.
Internal rate of return
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested. A drawback of this method is that a project can have multiple IRRs if a negative cash flow occurs during the project's lifetime.
Payback
Payback determines how long it would take the amount invested in a project to be recovered from the cumulative cash flows.
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