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Briefly describe (not define) the six models of a capital budgeting decision, which are typically defined as a 'go or no-go' decision. These are -
Briefly describe (not define) the six models of a capital budgeting decision, which are typically defined as a 'go or no-go' decision. These are -
- Payback period (standard)
- Discounted payback period (modified from payback period)
- Net present value (NPV) (standard)
- Internal rate of return (IRR) (standard)
- Modified internal rate of return (MIRR) (modified from IRR)
- Profitability index (PI) (modified from NPV)
In reviewing these, which one(s) is appropriate for small projects and which one(s) is appropriate for larger projects?
Which criteria and techniques do you consider the most useful? Please explain
Please choose one of these models and provide an example by showing the model's calculation in action.
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