Managers can choose from several analytical techniques to help them make capital investment...

Question

Managers can choose from several analytical techniques to help them make capital investment decisions. Each technique has advantages and disadvantages.

Respond to the following in a minimum of 175 words:

Distinguish between the 3 capital investment techniques of (1) Net Present Value, (2) Internal Rate of Return, and (3) Payback Method.
Describe what you consider to be the top 2 advantages and 2 disadvantages of each technique and provide an example to support your top advantage of each method.

Abhishek · Accepted Answer

Running Head: MANAGERIAL ACCOUNTING						1
MANAGERIAL ACCOUNTING 								5
MANAGERIAL ACCOUNTING
Table of Contents
Answer to Question 1: Differentiating Between Capital Investment Techniques	3
(1) Net Present Value	3
(2) Internal Rate of Return	3
(3) Payback Method	3
Answer to Question 2: Top Advantages and Disadvantages of Each Technique	3
Net Present Value	3
Internal Rate of Return	3
Payback Method	4
References	5
Answer to Question 1: Differentiating Between Capital Investment Techniques 
(1) Net Present Value
The net present value considers the time value in its approach. The process is different from the back period method. As it considers the value of time for the period, until which the project generates cash flow (Musibau, Mahmood, Ismail, Haruna & Khan, 2019). The process uses the method of analysis of the required rate of return that is required for future cash flow.

Managers can choose from several analytical techniques to help them make capital investment decisions. Each technique has advantages and disadvantages. Respond to the following in a minimum of 175...

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