The discounted cash-flow techniques - implicitly consider depreciation in rate of return computations; the compound interest tables automatically allow for recovery of investment. The net initial investment of an asset is usually regarded as a lump-sum outflow at time zero. Where taxes are included in the DCF analysis, deprecation cost are included in the computation of the taxable income number that is used to compute the tax payment cash flow.

-Why should mangers not become so enchanted with DCF that strategic considerations are overlooked?

-How can capital budgeting tools assist in evaluating a manager who is responsible for retaining customers of a cellular telephone company?

-Should a company accept all for investment proposals with positive NPV investment? Why or why not? What situation may a company should accept for investment all positive NPV investment alternatives?