Question: 5. What is the difference between the payback period and the discounted payback? 6. Define the Average Accounting Return (AAR). What are the disadvantages of

5. What is the difference between the payback period and the discounted payback?

6. Define the Average Accounting Return (AAR). What are the disadvantages of the AAR?

7. What is the Internal Rate of Return (IRR)? What is the IRR rule? How is the IRR calculated?

8. Do the NPV rules and IRR rules lead to identical investment decisions? If so, under what circumstances?

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