# Capital Budgeting Assignment

Which are the following are valid conclusions of capital budgeting? one of more can apply.

1) Managers have been slow to adopt the IRR because percentage returns are a harder concept to them to grasp?

2)The discounted payback period improves on the regular payback period by accounting for the time value of money.

3) For most firms, the re-investent rate assumption in the NPV is more realistic than the assumption in the IRR.

4) Because NPV is the best project criterion, only it should be used and the other criteria should be ignored.

5) The NPV is the best project criterion because it shows how much value the company is creating for its shareholders?

6) Because the NPV and NPV use the same reinvestment rate assumption, they always lead to the same accept/reject decision for mutually exclusive projects.

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Which are the following are valid conclusions of capital budgeting? one of more can apply.

1) Managers have been slow to adopt the IRR because percentage returns are a harder concept to them to grasp?

Its not valid as percentages are easy to understand

2)The discounted payback period improves on the regular payback period by accounting for the time value of money.

Yes its valid.

3) For most firms, the re-investent rate assumption in the ...

#### Solution Summary

Solution discusses Capital Budgeting Assignment