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c) explain the disadvantages of each criteria; payback period, discounted payback, NPV, IRR
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- Give at least two reasons for choosing the net present value method and at least two reasons each for rejecting IRR and discounted payback period methodWhat are the shortcomings of the payback period criterion? Which of these shortcomings are accounted for in the dynamic payback period criterion? Which are not?a) what is the discounted payback period? b) what is the NPV? c)What is the IRR? note: please you dont use excel.
- List the advantages and disadvantages of the payback method.The W.A.C.C. is a : a Composite opportunity cost metric b Simple opportunity cost metric c Risk-adjusted discount rate under all circumstances d Non-stochastic discount rate under all circumstancesWhat discount rate is used in a lessor’s NPV analysis?
- The potential benefit of one alternative that is lost by choosing another is known as a. An alternative cost. d. An opportunity cost. b. A sunk cost. e. An out-of-pocket cost. c. A differential cost.When performing benefit-cost analysis, economists usually discount future benefits and costs. Why? What are some reasons/justifications to apply relatively high discount rates? What counter-arguments are there to apply relatively low discount rates?What are the two main drawbacks of the payback method?