Intro & key concepts
5 important questions on Intro & key concepts
What is a a capital budget list
What are common methods to decide which projects to select
IRR
payback period
profitability index
When may the IRR and NPV be in conflict?
Multiple IRRs
Nonexistent IRR
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What are the biggest differences between NPV and IRR
Purpose --> NPV = project surplus ; IRR = breakeven cashflow
Decision support --> NPV = foundation ; IRR = not much (% does not tell investor how much will be made)
What are the issues with payback period?
ignores CF after Payback period
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