Q 2. Suppose an investment has conventional cash flows with positive NPV. How would it impact your decision based on capital budgeting techniques mentioned below? i. Profitability index (PI) ii. Internal Rate of Return (IRR) iii. Payback Period (PBP) 2020- 2020 2019 2018 Industry Average Ratio Inventory Turnover 62.65|42.42|32.25| Receivables in days 94 Debt to Equity Quick Ratio 53.25 63 50 115 0.75 0.85 0.90 0.88 1.028 1.03 1.029 1.031 Current Ratio 1.33 | 1.21 1.15 1.25

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Q 2. Suppose an investment has conventional cash flows with
positive NPV. How would it impact your decision based on
capital budgeting techniques mentioned below?
i. Profitability index (PI)
ii. Internal Rate of Return (IRR)
iii. Payback Period (PBP)
2020-
Ratio
2020 2019|2018
Industry
Average
Inventory Turnover 62.65 42.42 32.25
Receivables in days 94
Debt to Equity
53.25
63
50
115
0.75 0.85 | 0.90
0.88
|Quick Ratio
Current Ratio
1.028 1.03 |1.029
1.031
1.33 1.21 | 1.15
1.25
Transcribed Image Text:Q 2. Suppose an investment has conventional cash flows with positive NPV. How would it impact your decision based on capital budgeting techniques mentioned below? i. Profitability index (PI) ii. Internal Rate of Return (IRR) iii. Payback Period (PBP) 2020- Ratio 2020 2019|2018 Industry Average Inventory Turnover 62.65 42.42 32.25 Receivables in days 94 Debt to Equity 53.25 63 50 115 0.75 0.85 | 0.90 0.88 |Quick Ratio Current Ratio 1.028 1.03 |1.029 1.031 1.33 1.21 | 1.15 1.25
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