Four Major Drawbacks

Four Major Drawbacks - Be able to show superior performance...

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Four Major Drawbacks : * Firm cutoffs are  subjective . 2)  Does not consider  time value of money. 3) Does not consider any  required rate of return . 4) Does not consider  all  of the project’s  cash  flows. In capital budgeting, there are two kinds of  mistakes that can be made: 1) Reject a good project 2) Accept a bad project Does not consider  all  of the project’s cash flows. Example:  Management has chosen a  FOUR  year  cutoff payback period.  Will the following project  be accepted or rejected? Does not consider  all  of the project’s cash flows. Example:  Management has chosen a  FOUR  year  cutoff payback period.  Will the following project  be accepted or rejected? Do Grades Matter? Make Good Grades! Problems in the past?  Start now!!
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Unformatted text preview: Be able to show superior performance over some interval/category. * THOUGHT FOR THE DAY George Bernard Shaw: People are always blaming their circumstances for what they are. I dont believe in circumstances. People who get on in this world are the people who get up and look for the circumstances they want, and, if they cant find them, make them. Elder Ballard: I am a great believer that what you and I think about will ultimately come to pass I believe if we think about what it takes to be successful long enough and if we are willing to discipline ourselves to the principle of success, we will experience success....
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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.

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Four Major Drawbacks - Be able to show superior performance...

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