1) Surveys by various academics indicate that most companies, large and small, calculate the payback and apparently give it some weight in their capital budgeting decisions. Small com- panies often rely exclusively on the payback. What are the pros and cons of this criterion, and do you think PNC should give it any weight in its capital budgeting decision process?

2) Surveys by various academics indicate that more companies focus on the IRR than on the NPV. Why do you suppose this is so?