Question
A recent survey of American CFOs conducted by academics John Graham and Cambell Harvey asked CFOs to rate the frequency of their use of various
A recent survey of American CFOs conducted by academics John Graham and Cambell Harvey asked CFOs to rate the frequency of their use of various capital budgeting techniques. Graham and Harvey found that 75.7% of CFOs always, or almost always, relied on IRR to make capital budgeting decisions, and 74.9% relied on NPV. In particular, larger firms were more likely to rely on these techniques, as were firms with proportionately more debt.
You are being asked to put yourself in the shoes of a CFO. Describe and discuss what capital budgeting techniques you would rely upon and why?
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