Basic Capital Budgeting

1) Which are the following are correct:

--one drawback of the discounted payback is that this method does not consider the time value of money, while the regular payback overcomes this drawback.

--one drawback of the payback criterion is that this method does not take account of cash flows beyond the payback period.

--The regular payback ignores cash flows beyond the payback period, but the discounted payback method overcomes this problem.

----The shorter a project's payback period, the less desirable the project is normally considered to be this criterion.

---If a project's payback is positive, the the project should be accepted because it must have a positive NPV.

--The payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

--The discounted payback method is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

--The net present value method (NPV) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

--The internal rate of return method (IRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

--The modified internal rate of return method (MIRR) is generally regarded by academics as being the best single method for evaluating capital budgeting projects.

Solution Summary

Solution explains Basic Capital Budgeting