Question: 8a. Explain why it is better to make decisions about acceptance or rejection of proposed projects based on project net present value rather than on

8a. Explain why it is better to make decisions about acceptance or rejection of proposed projects based on project net present value rather than on project internal rate of return.

b. If a firm uses internal rate of return as the basis for its capital budgeting decisions, identify two things the firm should do to avoid making bad decisions due to shortcomings of the internal rate of return as a decision rule.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!