week 6

Why is capital budgeting such an important process? Why are capital budgeting errors so costly? Differentiate between NPV, PI, and IRR methods. What are the advantages and disadvantages of using each of these methods? Why is there a focus on cash flows rather than accounting profits in making capital-budgeting decisions? Why such an interest in incremental cash flows rather than total cash flows?

Instructions: Your initial response should be at least 250-words with at least one scholarly journal reference. Support your main response with at least 1 scholarly journal reference in addition to the course materials. Please note Wikipedia, Investopedia and similar websites are not credible academic references. Use the Online Library to research credible references. Respond to at least two of your classmates with a minimum of 100 words and include direct questions. Include in-text citations and references in APA format. Refer to Forums Grading Rubric for additional guidelines.