1: Describe the net present value (npv) method for determining a capital budgeting project's desirability. What is the acceptance benchmark when using npv? Distinguished-level: identify the npv method's strengths and weaknesses.

2: What is the payback period statistic? What is the acceptance benchmark when using the payback period statistic? Distinguished-level: identify what problem of the payback period method is corrected by using the discounted payback period method.

3: Describe the internal rate of return (irr) method for determining a capital budgeting project's desirability. What is the acceptance benchmark when using irr? Distinguished-level: explain how the npv and irr methods are similar and how they are different.

4: Describe the modified internal rate of return (mirr) method for determining a capital budgeting project's desirability. What are mirr's strengths and weaknesses? Distinguished-level: explain the differences in the reinvestment rate assumption that distinguishes mirr from irr.

5: Compute the npv statistic for project y and tell [advise] whether the firm should accept or reject the project with the cash flows shown in the chart if the appropriate cost of capital is 12 percent. Distinguished-level: explain how decreases in the cost of capital lead to an increase in the number of approved projects. Project y time 0 1 2 3 4 cash flow -$8,000 $3,350 $4,180 $1,520 $300 (cornett, adair, & nofsinger, 2016, p. 332).

6: Compute the payback period statistic for project a and recommend whether the firm should accept or reject the project with the cash flows shown in the chart if the maximum allowable payback is four years. Distinguished-level: if the discounted payback period were computed, identify if it would be less than, equal to, or greater than the non-discounted payback period. Project a time 0 1 2 3 4 5 cash flow -$1,000 $350 $480 $520 $300 $100 (cornett, adair, & nofsinger, 2016). Submit your completed task as an attachment in the task area. You may use either a word document or an excel spreadsheet for your work, but not both.

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Capital budgeting measurement criteria 1 In order to calculate the net present value the difference between the outflows and inflows is computed The net present value procedure is used in measuring th... View the full answer