Question: Explain the differences among payback period, net present value, and internal rate of return. Which do you think provides the best indicator of financial performance?

Explain the differences among payback period, net present value, and internal rate of return. Which do you think provides the best indicator of financial performance?

2. Explain how the future value of investments changes with the interest rate and length of time invested.

Chapter 19

3. Explain why a capital budget is necessary.

4. Explain the three factors that affect capital budget decisions.

Chapter 20

5. Explain the difference between stocks and bonds.

6. Define cash equivalents, list some types of cash equivalents, and their importance to the finance of the organization.

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