Why is the npv considered to be theoretically superior

Assignment Help Financial Management

Reference no: EM131328793

Why is the NPV considered to be theoretically superior to all other capital budgeting techniques?

Reconcile this result with the prevalence of the use of IRR in practice.

How would you respond to your CFO if she instructed you to use the IRR technique to make capital budgeting decisions on projects with cash flow streams that alternate between inflows and outflows?

Reference no: EM131328793

Questions Cloud

Cash flow projection more than a few years out are not worth : Using payback analysis, which ignores longterm cash flows, is more reasonable than making wild guesses as one has to do in the NPV approach." Respond to this comment.

Share an accomplishment you are proud : Identify two things you learned in this course that you couldn't have imagined being successful without practicing or having - Describe how course has helped you be a better writer.

Smart analysts can massage the numbers in npv analysis : It is better to use a simpler approach like payback or accounting rate of return that gives analysts fewer degrees of freedom to manipulate the numbers." Respond to this comment.

What happens to value of firm if positive npv project accept : In what way is the NPV consistent with the principle of shareholder wealth maximization? What happens to the value of a firm if a positive NPV project is accepted? If a negative NPV project is accepted?

Why is the npv considered to be theoretically superior : How would you respond to your CFO if she instructed you to use the IRR technique to make capital budgeting decisions on projects with cash flow streams that alternate between inflows and outflows?

Outline the differences between npv and irr and pi : Outline the differences between NPV, IRR, and PI. What are the advantages and disadvantages of each technique? Do they agree with regard to simple accept or reject decisions?

Shirts is a specialty retailer offering t-shirts : Custom Tailored Shirts is a specialty retailer offering T-shirts, sweatshirts, and caps. Its most recent annual sales consisted of $21,000 of T-shirts, $18,000 of sweatshirts, and $2,900 of caps. What sales amount should be used when evaluating the P..

What is the average contribution to net income : What is the average contribution to net income across all four years?- What is the average book value of the investment?

Discuss the nature of diffusion for emerging technologies : MN5563 Managing Technology & Innovation (MTI) Assignment. Marketing and Innovation: discuss the nature of 'diffusion' for emerging technologies and the importance of managing product development (including time to market) for a firm manufacturing p..

User Account

All Pages