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    Capital budgeting for projects

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    I need some assistance with this assignment please: Capital budgeting is the process by which long-term fixed assets are evaluated and possibly selected or rejected for investment purposes. The purpose of capital budgeting is to evaluate potential projects for possible investment by the firm.

    Questions: Address all of the following questions in a brief but thorough manner.

    1. What are the various methods for evaluating possible capital projects, in terms of their possible benefits to the firm? Describe the benefits and/or shortcomings of each.
    2. What is the NPV profile and what are its uses?

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    Solution Preview

    The response addressed the query is posted in 619 words with APA References
    //Capital budgeting is a process used for evaluating long-term investments and to identify whether they are worth pursuing or not. It comprises of various techniques to evaluate the capital projects in terms of profitability to the firm. The discussion is conducted on these various techniques and their benefits and limitations. On the other hand, another section will discuss the Net Present Value (NPV) and its uses. //
    Various Techniques and their Benefits and Limitations
    Payback Period Technique: This method identifies the period of payback of the investment or it reflects the period by which original investment will be recover. The benefit of this method is that it is easy to understand and calculate and is used as liquidity indicator of the project. The limitation is that it shows only the payback period and not the profitability of the project (Peterson, & Fabozzi, 2004).
    Discounted ...

    Solution Summary

    The response addressed the query is posted in 619 words with APA References