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- Define each of the following terms:a. Capital budgeting; payback period; discounted payback periodWhat is the most commonly used capital budgeting procedures? Select one: a. IRR b. Payback period c. Discounted Payback period d. NPV e. Profitability IndexWhat is the single best capital budgeting decision criterion? Explain.
- What are the advantages of the PI method of capital budgeting?List at least three characteristics of a capital budgeting study.Which of the following decision measures should capital budgeting decision makers consider? Select one: a. discounted payback b. NPV c. IRR d. MIRR e. Although NPV is considered the most important method in the decision process, the other measures can provide different relevant information that is useful to the process and thus should be used when appropriate
- In the context of capital budgeting, what is meant by the word “discounting”?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 valueWhich do you think is the most optimum method for capital budgeting? Explain your answer.