Npv – payback question | Business & Finance homework help

a) Suppose a project has conventional cash flows (means only one cash outflow/ outlay in the beginning) and a positive NPV.

1) What do you know about its payback?

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2) Its discounted payback?

3) Its profitability index?

4) Its IRR?Explain in your own language.

b) Can you apply capital budgeting criteria (discussed in the book) to not-for-profit corporations? How would such entities make capital budgeting decisions?

c) What about the U.S. government? Should it evaluate spending proposals using these techniques?

What could be the benchmark interest rate?


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