Briefly describe the actual capital budgeting methods of large U.S. corporations
What will be an ideal response?
Answer: According to recent surveys of CFOs, the most common methods are IRR and NPV used by more than 70% of large corporations. The payback method remains popular and is used as a primary or secondary method by almost 60% of those surveyed, perhaps because of its simplicity and for a quick calculation of risk.
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Relatively high costs of capital are more likely to occur in:
A) highly illiquid domestic securities markets. B) highly liquid domestic securities markets. C) unsegmented domestic securities markets. D) none of the above
The amount of drying time for the paint applied to a plastic component part is thought to be uniformly distributed between 30 and 60 minutes
Currently, the automated process selects the part from the drying bin after the part has been there for 50 minutes. Based on this, the probability that a part selected will not be dry is approximately 0.33. Indicate whether the statement is true or false