Why are NPV, BCR, and IRR considered SUPERIOR indicators of Project Feasibility compared to Payback or Recoupment Period and Accounting Rates of Return? Explain briefly.
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Q: 4.8
A: = FV/ (1+r)^n Here given FV =10000 r=7%, and n=15 years, So PV = 10000/ (1+7%)^15
Q: Payback IRR PI NPV NP-30 years. NX-20 years %
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- Explain why the NPV is a more accurate measure than IRR when evaluating the financial profitability of a project.Under what circumstances will you prefer profitability index to NPV as project evaluation techniques.Why is the net-investment test the only way to accurately predict projectborrowing? Explain with an example?