The Tools of Capital Budgeting

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This 7 page paper looks at their importance of capital budgeting and some of the tools which can be used in the process. Tools discussed include payback period, the accounting rate of return, net present value (NPV), the internal rate of return (IRR) and the profitability index. Consideration of the advantages and disadvantages of these different assessment methods is included in the discussion. The bibliography cites 6 sources.