Capital investment decisions are based on accurate analysis of cash flows in a business. Managers can choose from several analytical techniques to analyze cash flows. Some techniques take into account the time value of money and some do not.

Respond to the following

• Briefly describe 2 analytical techniques based on the time value of money concepts.
• Briefly describe 2 analytical techniques which are not based on the time value of money concepts.
• Describe what you consider to be the top 2 advantages and 2 disadvantages of each technique and provide an example to support your top advantage of each method.

Answer rating: 100% (QA)

Analytical Techniques Based on Time Value of Money 1 Net Present Value NPV NPV is a technique that discounts all cash inflows and outflows back to their present value using a predetermined discount ra... View the full answer