Question: 1) The net present value method is used to evaluate capital investments. Describe this method. Be sure to address why the time value of money

1) The net present value method is used to evaluate capital investments. Describe this method. Be sure to address why the time value of money is an important component.

2)Describe the payback period method of analyzing an investment. What are two drawbacks to this method?

3) What is the profitability index? Why is this better than the net present value method when youre trying to compare investments of different sizes?

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