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14-11 14-12 14-13 14-14 14-15 As the discount rate increases, the present value of a given future cash flow also increases. Do you agree? Explain.

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14-11 14-12 14-13 14-14 14-15 As the discount rate increases, the present value of a given future cash flow also increases. Do you agree? Explain. Refer to Exhibit 14-8. Is the return on this investment proposal exactly 14%, more than 14% or less than 14%? Explain. How is the profitability index computed, and what does it measure! What is meant by the term payback period? How is the payback period determined? How can the payback method be useful? What is the major criticism of the payback and simple rate of return methods of making capital budgeting decisions

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