Question: Q1) The Net Present Value (NPV) measures the difference between the expected value of future cash flows and the present value of upfront costs. How

Q1) The Net Present Value (NPV) measures the difference between the expected value of future cash flows and the present value of upfront costs. How does one account for potential future costs?

Q2) What is the Internal Rate of Return (IRR) and what must one worry about when using IRR to evaluate investments?

Q3) What do we mean by capital constraints? How does one evaluate alternative investments under capital constraints?

Q4) What is the payback rule and why might it sometimes be a good "rule of thumb"?

Q5) What are the three important cases where use of an Equivalent Annual Annuity is important? How do these cases relate to mutually exclusive projects?

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