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PENN STATE / Russian / RUS 100 / Capital Budgeting: Alternatives to NPV NPV= Co + ?(Ct/(1+r)^t) Take if

Capital Budgeting: Alternatives to NPV NPV= Co + ?(Ct/(1+r)^t) Take if

Capital Budgeting: Alternatives to NPV NPV= Co + ?(Ct/(1+r)^t) Take if

Description

School: Pennsylvania State University
Department: Russian
Course: Corporate Finance
Term: Spring 2014
Tags:
Cost: 50
Description: Capital Budgeting: Alternatives to NPV NPV= Co + ∑(Ct/(1+r)^t) Take if NPV>0 - Attributes: Uses CFs, NPVs add up, all CF considered Alternatives: Payback Period Rule: Payback period (PP) = the # of periods required to recover initial investment - Rule: If PP < firm cut off then take! - Problems: 1) Ignores timing of flows, not discounting CFs (solution: Discounted payback period); 2) Ignoring flows
Uploaded: 07/08/2017
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