1. WHAT CAPITAL BUDGETING SHOULD HAVE AZLAN CARRIED OUT IN ORDER TO FACILITATE DECISION-MAKING IN THE BUSINESS? DISCUSS. • INTERNAL RATE OF RETURN METHOD • MOST COMMON METHOD USED IN BUSINESSES BUT MOST COMPLEX • IRR HELPS TO COMPARE THE RETURN OF ASSET TO THE COST OF FINANCING THE PROJECT. IT IS SIMILAR TO AND INCLUDES THE NET PRESENT VALUE METHOD TO CALCULATE RATE OF RETURN. • IF THE IRR ABOVE THE COST, THE PROJECT IS CONSIDERED OR EXPECTED TO BE PROFITABLE. BUT IF THE COSTS EXCEED THE RETURN, THEN THE PROJECT IS EXPECTED TO HAVE A LOSS.
