What is the difference between NPV,IRR, Payback analysis and how are these methods related?
Read Ross, S.A. (2013) Fundamentals of corporate finance (10th ed). New York, NY: McGraw Hill/Irwin Chapter 9.
After reading the 9th chapter of the text and doing some research on the internet regarding how a company makes capital decision
You should be able to explain and support your reactions to the following questions:
- What is the difference between NPV,IRR, Payback analysis and how are these methods related?
- What are examples of opportunity costs and incremental cash flows?
- How does the cash flow of a project impact whether or not a company pursues a certain project?
- Give an example of how you would employ the different capital budgeting techniques to a real life situation or a situation you can envision. How would you differentiate among three different projects if you could only pursue one of those projects?
joyce
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