Reference no: EM131137934
Answer the folowiinf question on the basis of the The Fundamentals of Capital Budgeting
1. Discuss why capital budgeting decisions are the most important decisions made by a firm's management.
2. Explain the benefits of using the net present value (NPV) method to analyze capital expenditure decisions, and be able to calculate the NPV for a capital project.
3. Describe the strengths and weaknesses of the payback period as a capital expenditure decision-making tool, and be able to compute the payback period for a capital project.
4. Explain why the accounting rate of return (ARR) is not recommended as a capital expenditure decision-making tool.
5. Be able to compute the internal rate of return (IRR) for a capital project, and discuss the conditions under which the internal rate of return (IRR) technique and the NPV technique produce different results.
6. Explain the benefits of a postaudit review of a capital project.
Academic requirements:
• Your work must be submitted as pages 3 of pages
• Your work should be submitted in the formats outlined for each question in the assignment.
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The fundamentals of capital budgeting
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