rate of return

Question 2 H Imagine you are the manager of a business. After calculating the payback period of two different potential investment opportunities, you find the payback periods of both investments are shorter than the payback period required by the business. One investment opportunity's payback period is however shorter than the other. 2.1 Which one of the two investment opportunities should you pursue? Your answer should be 10 to 20 words in length. 2.2 What is the disadvantage of using the payback period approach to investment appraisal? (That is, in what way might it lead to poor decision-making?) Your answer should be 30 to 40 words in length Question 3 Assume that the net present value for an investment is calculated as -E14,000, at a rate of return of 8%. What does this imply about the internal rate of return? Your answer should be 10 to 20 words in length