B is a company with a strong risk appetite.

A high level of subjective judgment is required from the decision maker.

It avoids the need for the investor to estimate an appropriate discount rate which reflects the risk of the project cash flows.

By building a risk adjustment into the discount rate, it takes greater account of risk in later time periods.

More risky projects are more likely to be accepted using this method of appraisal.

The method produces the most appropriate results in cases where project cash flows do not increase in risk over time.