Why it is important to consider relevant cash flow when evaluating capital projects? Use 5 principles of finance to compare them?
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- Explain how a net present value (NPV) profile is used to compare capital projects. How does this profile compare to that of internal rate of return (IRR)? How does reinvestment affect both NPV and IRR? Support your rationale with at least one citation from the literature.EXPLAIN EACH WITH EXAMPLE 1. EVALUATING CAPITAL INVESTMENT PROJECTS 2. CAPITAL INVESTMENT FACTORS 3.NET INVESTMENT 4.NET RETURNSWhat is the key output of a financial plan?
- Explain how a net present value (NPV) profile is used to compare capital projects. How does this profile compare to that of internal rate of return (IRR)? How does reinvestment affect both NPV and IRR?Discuss the concept of an optimal capital structureDiscuss the advantages and disadvantages of using the Net Present Value method for analyzing capital investment projects.
- Find the external finance neededWhich 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 return• Give a conclusion about capital budgeting and its techniques.
- (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?Explain Initial Capital Contributions with example?Discuss the advantages and disadvantages of using the Internal Rate of Return method for analyzing capital investment projects.
