Differentiate between the Net Present Value method and Internal Rate of Return method of capital budgeting. Please give an explanation with an example for each method.
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- (1) What are the three types of risk that are relevant in capital budgeting? (2) How is each of these risk types measured, and how do they relate to one another? (3) How is each type of risk used in the capital budgeting process?What is the most commonly used capital budgeting procedures? Select one: a. IRR b. Payback period c. Discounted Payback period d. NPV e. Profitability Index• Give a conclusion about capital budgeting and its techniques.
- What exactly is the analytic hierarchy process (AHP) and how can it be used in the context of capital budgeting choices are two important questions.Outline the limitations of the capital asset pricing model as a method for obtaining discount rates for the purposes of capital budgeting.Which of the following is the most reliable method for making capital budgeting decisions? a. ARR method b. Post-audit method c. NPV method d. Payback method
- List out the evaluation techniques used in capital budgeting. According to you which technique is suitable for organization and why?Capital budgeting analysis is based onGenerally, 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 value