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Lecture15 - TOPIC 15 ALTERNATIVES TO NPV Reading Chapter 7...

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89 T OPIC 15 A LTERNATIVES TO NPV Reading: Chapter 7 Practice problems: online Objectives: Understand the Internal Rate of Return Identify the weaknesses of Internal Rate of Return, understand the superiority of NPV, and be able to make a strong argument as to why companies should use NPV and not IRR Use NPV to choose between mutually exclusive projects Understand the payback period and book rate of return and be able to explain why they make for poor investment criteria
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