B. What are the strength and weaknesses of each of the following capital budgeting technique below? i. Payback ii. ARR Profitability Index iv. IRR
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- Compare capital budgeting decision criteria, Net Present Value (NPV) and Internal Rateof Return (IRR).b. Is it possible for conflicts to exist between the NPV and the IRR when mutually exclusiveprojects are being evaluated? Explain.One of the modern methods of Capital Budgeting is: O a. Profitability index O b. Accounting Rate of Return O c. Payback period d. None of theseWhat is the most commonly used capital budgeting procedures? Select one: a. IRR b. Payback period c. Discounted Payback period d. NPV e. Profitability Index
- Generally, which of the following measurements is considered the best single criterion in capital budgeting decisions? a. WACC b. Internal rate of return c. Payback d. Net present valueWhat is the difference between NPV and IRR? Which one would you choose for evaluating a potential investment and why? Be sure to support reasoning with evidence for each capital budgeting metric (i.e., the NPV and IRR).What ROI will equate the PV of Inflows and the PV of outflows? a. Internal rate of return (IRR) b. Cost of capital rate c. The desired rate of return d. The minimum rate of return.
- Which of the following is not a method for incorporating risk analysis into capital budgeting? a. Positive/Negative analysis b. Monte Carlo simulations c. Scenario analysis d. Sensitivity analysis e. Decision tree modelsMethods that ignore the time value of money in capital investment appraisal include which of the following? a. Net present valueb. Discounted payback c. Average rate of return d. All of the aboveWhich capital budgeting technique defines returns in terms of income instead of cash flows? a) The payback period b) The internal rate of return technique c) The net present value technique d) The unadjusted rate of return method
- Which methods of evaluating a capital investment project ignore the time value of money? Multiple Choice Net present volue and accounting rate of retum, Accounting rate of return and internal rate of return. Internal rate of return and payback perlod.Which of the following are present value methods of analyzing capital investment proposals? a. internal rate of return and average rate of return b. average rate of return and net present value c. net present value and cash payback d. net present value and internal rate of returnOne of the modern methods of Capital Budgeting is: a. Profitability index b. Accounting Rate of Return c. None of these d. Payback period