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8. Discussion (No outside sources required all necessary information has been presented in Module 4...

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Accounting

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8. Discussion (No outside sources required all necessary information has been presented in Module 4 in Moodle) a) Using what you have learned in the lecture notes and having just analyzed each of the projects using the four key capital budgeting techniques, describe the reinvestment assumptions for each of the methods. (4 pts) Hint the reinvestment rate assumptions have to do with how (if the cash flows are discounted during analysis. i. NPV ii. IRR iii. Profitability Index (PI) iv. Payback period b) How would a change in the required rate of return affect the project's calculated internal rate of return (IRR)? Explain. Would the accept/reject decision change using the IRR analysis method? Explain. (2 pts)

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