Question: Compare and contrast the Net Present Value (NPV) method with the Payback Rule for evaluating investment projects. How do these methods address investment risk and

Compare and contrast the Net Present Value (NPV) method with the Payback Rule for evaluating investment projects. How do these methods address investment risk and project profitability? Discuss the differences between the Internal Rate of Return (IRR) and the Modified Internal Rate of Return (MIRR). How do these metrics impact the decision-making process for capital investments? Explain how incremental cash flows differ from total project cash flows when assessing a new investment. Why is it important to consider sunk costs, opportunity costs, and side effects in this analysis? How does the inclusion of net working capital and depreciation affect the calculation of project cash flows and the evaluation of capital investment decisions? Provide examples to illustrate these effects. Evaluate the role of pro forma financial statements in capital budgeting. How do they aid in forecasting project cash flows and assessing the financial viability of an investment

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