Describe the most important capital budgeting techniques and how they are used to arrive at investment decisions. Name at least two capital budgeting techniques (for example, NPV, IRR, Payback Period, et cetera) How does a manager differentiate when to use capital budgeting versus simple return on investment (ROI) techniques?
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- How does a manager differentiate when to use capital budgeting versus simple return on investment (ROI) techniques?Discuss the payback period, NPV (net present value), and IRR (internal rate of return) methods for capital budgeting analysis. What result does each method provide the user? What are the limitations of each of these methods? Which method would you find most useful in making the best investment decisions for your business and why?Comparing the estimated net present values or internal rates of return for an investment using several different values for one or more key variables is called Multiple Choice capital budgeting. discounting. sensitivity analysis. compounding.
- What is the analytic hierarchy process (AHP), and how can it be used in making capital budgetingdecisions?List out the evaluation techniques used in capital budgeting. According to you which technique is suitable for organization and why?Discuss and Evaluate the use of sensitivity analysis and scenario analysis in capital budgeting. How can these techniques help firms assess the impact of varying assumptions and market conditions on investment projects?
- What 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 capital budgeting? Are there any similarities between a firm’s capital budgeting decisions and an individual’s investment decisions? Include work/personal experiences as application of your argument.What is a capital budgeting technique that generates decision rules and associated metrics for choosing projects, based on the implicit, expected geometric average of a project's rate of return?
- Capital Budgeting is acquiring inputs with long term returns. Which of the following author gave the above definition? a. Charles Richard b. Lyrich c. Charles T.Hrongreen d. Richard Green LawWhich of the following scenario shows the financial manager’s financing function? a. Prioritizing investments based on properly computed capital rationing method. b. Capital budgeting computation and decision with regards to the planned acquisition. c. Assessing and selecting a long-term and short-term financing tools that has a low cost. d. Monitoring trends in operating expenses for the purpose of budget allocation.Explain how capital budgeting helps companies contribute to value creation. Discuss each of the following different techniques: NPV, IRR and the Payback Period analysis. Choose one and provide an example.