Respond to the following comments: a. I like the IRR rule. I can use it to rank

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Respond to the following comments:

a. “I like the IRR rule. I can use it to rank projects without having to specify a discount rate.”

b. “I like the payback rule. As long as the minimum payback period is short, the rule makes sure that the company takes no borderline projects. That reduces risk.”

Payback Period
Payback period method is a traditional method/ approach of capital budgeting. It is the simple and widely used quantitative method of Investment evaluation. Payback period is typically used to evaluate projects or investments before undergoing them,...
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Principles of Corporate Finance

ISBN: 978-0072869460

7th edition

Authors: Richard A. Brealey, Stewart C. Myers

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