Please only attempt this if you are willing to answer all 5 questions.

Chapter of managerial accounting, focus on Capital Budgeting Decisions

1311

As the discount rate increases, the present value of a given future cash flow also increases. Do you agree? Explain.

1313

How is the project profitability index computed, and what does it measure?

1314

What is meant by the term payback period? How is the payback period determined? How can the payback method be useful?

1315

What is the major criticism of the payback and simple rate of return methods of making capital budgeting decisions?