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Net present value and profitability index are commonly referred to as the most optimal primary decision rules when completing the capital budgeting process. Explain the
Net present value and profitability index are commonly referred to as the most optimal primary decision rules when completing the capital budgeting process. Explain the benefits, and common uses of these two decision rules. In your answer, please ensure you explain in which context each decision rule should be applied. When assessing mutually exclusive projects, will these decision rules ever provide contradicting recommendations? Briefly explain why.
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