Net Present Value (NPV) method, Internal Rate of Return (IRR) method, Equivalent Annual Annuity (EAA) method and Payback Period method are the main important decision-making tools for corporate investment. You are allowed to address the following questions in Dot points with sufficient elaboration and justification.

a) What is the investment decision? Describe the process of an investment decisionmaking in corporations.

b) Which of the abovementioned decision-making tools are discounting method and which of them are non-discounting method? Why?

c) Identify the advantages and disadvantages for Payback, NPV and IRR methods.

d) When would one use EAA method?

e) In which case may one face a conflict between NPV and IRR methods? f) If there is conflict, which method should be used, and why? g) What is capital rationing? How does this going to affect the decision making?

(1000 words limit)