 Introduction to Managerial Accounting Jeannie M. Folk Ray H. Garrison Eric Noreen
Capital Budgeting Decisions
Learning ObjectivesAfter studying Chapter 12, you should be able to:
1Determine the acceptability of an investment project using the net present value method. |
 |  |  | 2Prepare a net present value analysis of two competing investment projects using either the incremental-cost approach or the total-cost approach. |
 |  |  | 3Rank investment projects in order of preference using the profitability index. |
 |  |  | 4Determine the payback period for an investment. |
 |  |  | 5Compute the simple rate of return for an investment. |
 |  |  | 6(Appendix 12A) Explain the concept of present value and make present value computations. |
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