Chapter 11

Chapter 11 - * * * Chapter11:ProfitabilityIndex&IRR

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
* IRR * Chapter 12: Part 1 Discussion * Includes  all cash flows  that occur  during the  life  of the project. 2) Considers the  time value of money 3) Incorporates the  required rate of   return  (i.e. risk) of the project.  [ Remember INVERSE  relationship!] There are  Four Methods  discussed in Chapter 11.  An  analyst needs to carefully weigh the strengths and  weaknesses of each method before making a long-term  capital budgeting decision. * Payback Period * Net Present Value (NPV) * Profitability Index (PI) * Internal Rate of Return (IRR) -350,000   CFj  (Time 0) [Flash 0; CF] 75,000  CFj  (Time 1-6)  [Flash 1; CF]
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6                          Shift  Nj  [Flash 1; N] 88,500  CFj  (Time 7-9)  [Flash 2; CF] 3                        Shift  Nj  [Flash 2; N] 125,000 
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/23/2011 for the course BUS M 301 taught by Professor Jimbrau during the Summer '11 term at BYU.

Page1 / 3

Chapter 11 - * * * Chapter11:ProfitabilityIndex&IRR

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online