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Based on the reviews of the Capital Budgets, respond to the following discussion questions. You are encouraged to research outside sources and, of course, cite
Based on the reviews of the Capital Budgets, respond to the following discussion questions.
You are encouraged to research outside sources and, of course, cite them. Do not, however, quote sources word-for-word, but rather, respond to the Discussion Forum Question in your own words.
1. Identify four reasons that capital budgeting decisions by managers are risky.
2. Why is an investment more attractive to management if it has a shorter payback period?
3. Why should managers set the required rate of return higher than the rate at which money can be borrowed when making a typical capital budgeting decision?
4. Why does the use of the accelerated depreciation method (instead of straight line) for income tax reporting increase an investments value?
After youve completed the questions above, please provide a brief explanation of how this information is important in managerial decision making.
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