Attempts Score/2 1. 11 The Basics of Capital Budgeting Introduction Firms use capital budgeting for their long-term asset investment decisions Capital budgeting is important because wedisinvestment decisions chart company's course for the future Capital budgeting is similar in principle to feed which future can flows wrested, trend reflected in a cost of capital discount rate, and all cash flows an evaluated on a value hast. The primary methods used in the present value, Internal rate of return, Modified internal rate of return, and Payback Projects that is considerare either independent of mutually exclusive in addition projects may have normal cash flows or nonnormal cash flows. Whether a project independent or mutually will act the budgeting analysis as we will see when we discuss the different decisiones 1. 1: The Basics of Capital Budgeting: Introduction Firms use capital budgeting for their long-term asset investment decisions. Capital budgeting is important because fixed asset investment decisions chart a company's course for the future. Capital budgeting is similar in principle in which future cash flows are estimated, risks are appraised and Interest analysis reflected in a cost of capital discount rate, and all cash flows are evaluate alue basis. The primary methods used in this process are: Net risk analysis present value, Internal rate of return, Modified internal rate of return, ang security valuation lat firms consider are either independent of mutually exclusive. In addition, projects may have normal cash flows or nonnormal cash flows. Whether a project is independent or mutually exclusive will impact the firm's capital budgeting analysis as we will see when we discuss the different decision rules. 1. 1: The Basics of Capital Budgeting: Introduction Firms use capital budgeting for their long-term asset investment decisions. Capital budgeting is important because fixed asset investment decisions charta company's course for the future. Capital budgeting is similar in principle to select in which future cash rows are estimated, isks are appraised and reflected in a cost of capital discount rate, and all cash flows are evaluated on See value basis. The primary methods used in this procesare Net present value, Internal rate of return, Modified internal rate of return, and Pay comand hat is considerare either independent or mutually exclusive. In present addition, projects may have normal cash flows or nonnormal cash flows ure ct is independent or mutually exclusive will impact the firm's capital budgeting analysis as we will see when we discuss the different decision rules