What are the pros and cons of the various capital budgeting decision methods (NPV, IRR, MIRR,...

90.2K

Verified Solution

Question

Finance

What are the pros and cons of the various capitalbudgeting decision methods (NPV, IRR, MIRR, PB, DPB)? If you had topick one method to use for all project valuation situations, whichone would you pick, and why?
Please explain your answer! I am trying to understandthe concept.

Answer & Explanation Solved by verified expert

4.2 Ratings (659 Votes)

PARTICULARS PROS CONS NET PRESENT VALUES IT CONSIDERS THE TOTAL CASH INFLOWS GENERATED BY A PROJECT OVER ITS LIFE TIME PRESENCE OF TIME VALUE OF MONEY FACTOR IN EVALUATING THE MUTUALLY EXCLUSIVE PROJECT THIS TECHNIQUE IS BEST SUITABLE NOT SUITABLE FOR PROJECTS HAVING UNEQUAL LIVES AND WITH LIMITED FUNDS INVOLVES CALCULATIONS WITH See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

What are the pros and cons of the various capitalbudgeting decision methods (NPV, IRR, MIRR, PB, DPB)? If you had topick one method to use for all project valuation situations, whichone would you pick, and why?Please explain your answer! I am trying to understandthe concept.