Why might it be rational for a small firm that does not have access to the capital
Question:
Why might it be rational for a small firm that does not have access to the capital markets to use the payback method rather than the NPV method?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (12 reviews)
Payback provides information on how long funds will be tied up in a project The ...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Question Posted:
Students also viewed these Corporate Finance questions
-
Why might it be appropriate to defer cost considerations until after evaluating the performance capabilities of various engineering materials?
-
Why might it be better to lean against credit-driven bubbles rather than just clean up after other types of asset bubbles burst?
-
Why might it be a good idea to compensate those teaching classes in bookkeeping based on their students' performance on standardized tests, but not a good idea to compensate those teaching Ph.D....
-
1. You are the audit partner in charge of five audits which have recently been completed. You are reviewing the files and you now only have to decide which form of audit report you will sign off....
-
IOU Inc. has EBIT of $58,000, depreciation and amortization of $12,000, interest expenses of $21,000, principal repayments of $17,000, and a tax rate of 35 percent. Calculate IOU Inc.'s interest...
-
Determine the x- and y-coordinates of the centroid of the shaded area. [0.762, 0.533] T 1L y = kx/3 -|2 X
-
Consider a steam engine that operates in a Rankine cycle as shown in Figure 10.40: The turbine exhaust is a saturated vapor. (a) Find the saturation temperature of the turbine exhaust. (b) For an...
-
Grindwell, Inc, a manufacturer of grinding tools, is concerned about the durability of its products, which depends on the permeability of the sinter mixtures used in production. Suspecting that the...
-
Two Riders players tackle the Argos quarterback in a football game. The first Riders player applies a force of 600 N [W] to the Argo player while the other Rider tackler impacts him with 750 N [S 15...
-
Meet the Marcottes, Martin and Luz Marcotte that is. Martin is a successful graphics designer who is 38 years old, while Luz is a counseling psychologist, 35 years old, and is working at a State...
-
Discuss the following statement: If a firm has only independent projects, a constant WACC, and projects with normal cash flows, the NPV and IRR methods will always lead to identical capital budgeting...
-
Project X is very risky and has an NPV of $3 million. Project Y is very safe and has an NPV of $2.5 million. They are mutually exclusive, and project risk has been properly considered in the NPV...
-
It can be inferred from the passage that ancient humans and chimpanzees: F. Share a DNA structure that is more similar than that of any two other animals. G. Only ate meat when fruit, grains, and...
-
Have you had to manage from a cost center type of report? If so, how was it categorized?
-
If so, do you use a computerized program?
-
What are two main advantages that the corporate form has over partnerships?
-
What is the major capital source for not-for-profit organizations, early in their existence?
-
If you were assigned to prepare a capital expenditure budget request, what two people would you most want to have on your team? Why? How would you expect to use them?
-
Rehmat Islamic Bank sells a generator under a Murabaha contract which it acquired for Rs 1,000,000. The terms of the contract require that instalment are due over a period of three years. The annual...
-
White Bolder Investments (WBI) You are an intern working for WBI, a large investment advisory services in Sydney. Among other regular customers, WBI has been providing advisory services for Jumbo...
-
Draw plausible structures of the following chelate complexes. (a) [Pt(ox) 2 ] 2 (b) [Cr(ox) 3 ] 3 (c) [Fe(EDTA)] 2 .
-
What is a yield curve, and what information would you need to draw this curve?
-
Assume that the real risk-free rate is r* = 2% and the average expected inflation rate is 3% for each future year. The DRP and LP for Bond X are each 1%, and the applicable MRP is 2%. What is Bond Xs...
-
Briefly explain the following statement: Although long-term bonds are heavily exposed to interest rate risk, short-term T-bills are heavily exposed to reinvestment rate risk. The maturity risk...
-
If a set of m+1 data points (x,y) are to be represent by a least squares fit of y=c logx derive an expression for c in terms of x and y.
-
5 If 0 = then 4 cos(0) = sin(0) =
-
Determine the reactions of the given beam using slope deflection method. P = 25 kN, P2 = 25 kN, and w = 25 kN/m P1 P2 2m B 2m C 4m 21 Numerical answer in 4 decimal places and positive values only: RA...
Study smarter with the SolutionInn App