Why is capital budgeting very important for a firm

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Why is capital budgeting very important for a firm?

Why do we analyze independent projects and mutually exclusive projects differently?

What's the difference between payback period and discounted payback period? Do you know any projects that used these two capital budgeting techniques?

Why is the NPV method the best capital budgeting technique?

What's the rationale for the IRR method? How to calculate a project's IRR numerically?

Why do the NPV profile of two mutually exclusive projects cross?

What're the reinvestment rate assumptions for NPV and IRR?

Why do we calculate Modified IRR (MIRR)? What're problems associated with the IRR method?

Simply summarize the strengths and weaknesses of six capital budgeting techniques: Payback, discounted payback, NPV, IRR, MIRR, Profitability index.

What's the reasoning behind the EAA (Equivalent Annual Annuity) approach?

What's the reasoning behind the replacement chain approach?

What's a project's economic life and physical life?

Why do we conduct the optimal capital budgeting for a firm?

What's capital rationing? Why should a firm perform capital rationing analysis?

Reference no: EM132942842

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