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Suppose a company has five different capital budgeting projects from which to choose, but has constrained funds and cannot implement all of the projects. Explain
Suppose a company has five different capital budgeting projects from which to choose, but has constrained funds and cannot implement all of the projects. Explain why comparing the projects' NPVs is better than comparing their IRRs. How is the IRR determined if there are uneven cash flows? Why does the failure to consider soft benefits discourage investment
Do you think preferences should enter into the decision? if so how and why? What would a preference be? |
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