Learning Objectives

After completing this chapter, you will be able to:

Calculate the net present value (NPV) of a capital investment and use the NPV to decide whether the investment should be made

Under conditions of capital rationing, choose the vest combination of investments from a group of acceptable capital investment opportunities

Select the best investment from two or more mutually exclusive investments

Calculate the internal rate of return (IRR) of a capital investment and use the IRR to decide whether the investment should be made

Calculate the payback period of a capital investment

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