Doubt

NPV is the only investment appraisal technique in financial management that takes into account the relative size of investment. The Net Present Value (NPV) method considers the cash flows generated by the investment project and discounts them to their present value using a predetermined discount rate. This allows for the comparison of projects of different sizes by considering the timing and magnitude of cash flows.

Other techniques such as Internal Rate of Return (IRR) and Payback Period do not explicitly consider the relative size of the investment.

NPV (Net Present Value) is considered an absolute measure of return, while other measures such as IRR (Internal Rate of Return), payback period, and ROCE (Return on Capital Employed) are considered relative measures of return.