Investment analysis Identify one primary strength and one primary weakness for each of the following methods...

Investment analysis Identify one primary strength and one primary weakness for each of the following methods of investment analysis: A. Net present value B. Internal rate of return C. Payback Please explain in depth.

Expert Solution

A. Net present value:

Strength

? NPV gives the importance to the time value of money. It consider the profitability and risk of the project. It helps in maximizing the value of firm.

Weakness:

NPV cannot give the accurate decision if amount of investment of mutually exclusive projects are equal. It is difficult to calculate the appropriate discount rate.

B. Internal rate of return:

strength:

The profitability of the project is considered the entire economic life of a project. In this true profitability of the project is evaluated. It gives much importance to the objective of maximizing the shareholders wealth.

Weakness:

?This method assumes that the earnings are reinvested at the internal rate of return for the remaining life of the project. If average rate of return earned by the firm is not close to the IRR. So the profitability is justifiable.

C. Payback:

Strength:

The most significant advantage is its Simplicity. It is easy to compare the several projects and then to take the project which has shortest payback period.

Weakness:

The most serious disadvantage of the payback method is that it does not consider the time value of money i.e. ignore the time value of money.

jeff jeffy answered 2 years ago

Identify one primary strength and one primary weakness for each of the following methods of investment...

Identify one primary strength and one primary weakness for each of the following methods of investment analysis: A. Net present value B. Internal rate of return C. Payback

Identify and describe three major research methods. For each, identify a strength and a weakness. Give...

Identify and describe three major research methods. For each, identify a strength and a weakness. Give a specific example of each.

Identify one strength and one weakness of influencer marketing other than those in the textbook. Given...

Identify one strength and one weakness of influencer marketing other than those in the textbook. Given those answers, is influencer marketing effective? Why? Two Paragraph Answer needed.

Identify each item in the list above as either a strength or a weakness in internal control, and give your reason for each answer.

Question Understanding the Sarbanes-Oxley Act and identifying internal control strengths and weaknesses. The following situations suggest a strength or a weakness in internal control.a. Top managers delegate all internal control procedures to the accounting department.b. Accounting department staff (or the bookkeeper) orders merchandise and approves invoices for payment.c. Cash received over the counter is controlled by the sales clerk, who rings up the sale and places the cash in the register. The sales clerk matches the total recorded by the...

Please conduct a SWOT Analysis of Tom's shoes..= strength, weakness and threats.

Determine whether each of the following is an internal control strength or weakness. Explain your answer....

Determine whether each of the following is an internal control strength or weakness. Explain your answer. 1. Receiving department manager places an order with the vendor for merchandise inventory. 2. A voucher is used to certify a transaction and authorize recording of the liability. 3. Goods are received by the receiving department and documented with a receiving report. 4. Accounting department pays the vendor's invoice before goods are received. 5. Invoices are paid after completion of the invoice approval documenting...

Determine and discuss one strength and one weakness on the symbolic interactionist theory of deviance

List one strength and one weakness of credit ratings as a key ingredient in corporate credit...

List one strength and one weakness of credit ratings as a key ingredient in corporate credit risk measurement methods, with brief explanations.

determine and discuss one strength and one weakness of best constructionist perspective on the fdeviance using...

determine and discuss one strength and one weakness of best constructionist perspective on the fdeviance using examples from both western and non-western cultures

Compare the strength and weakness of those working settings and arrangements listed below. Identify which are...

Compare the strength and weakness of those working settings and arrangements listed below. Identify which are individual settings and which are group settings. 1. job sharing 2. self-management teams 3. compressed work week 4. flex time 5. offsite work 6. contract work

Question