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QUESTION 5 Both net present value and the internal rate of return incorporate the same data and utilize the same time value o
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NPV AND FORMULA

Net Present Value simply means that series of cash flow occurring in different time period.the cashflow changes in different interval between present and future.it related to discount rate also. NPV calculate time value of money

formula:=(Cash flow)/(1+r)i

i stand for Time period

r stands for Discount rate

IRR AND FORMULA

the internal rate of return stands for the expected future rate of return. IRR is the future annual rate of return.

T 0 = NPV = Ct (1 + IRR) - Co t=1

:Ct​=Net cash inflow during the period

tC0​=Total initial investment costs

IRR=The internal rate of return

t=The number of time periods​

3.Why NPV is important

net present value is more accurate than any other models of capital  budgeting it also have its own decision rule also

4.WACC DEFINITION

WEIGHTED AVERAGE COST OF CAPITAL Stand for calculation of a companies' cost of capital in which category of capital is best or proportionally weighted. which type of capital is suitable for the firm including common stock and more

5.weigted average cost of capital is more important because it help to decision making and in real business the valuation of WACC determine the capital segment of the company

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