Identify One Primary Strength and One Primary Weakness for Each

question 108

Essay

Identify one primary strength and one primary weakness for each of the following methods of investment analysis.
Net present value:
Strength:
Weakness:
Internal rate of return:
Strength:
Weakness:
Profitability index:
Strength:
Weakness:
Payback:
Strength:
Weakness:
Average accounting return:
Strength:
Weakness:

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Definitions:

Depreciation Expense

A non-cash charge that reduces the value of fixed assets due to wear, tear, or obsolescence over time.

Accounting Sense

Pertains to the manner in which financial transactions are recorded and understood within the realm of accounting.

Financial Sense

Pertains to the practical and prudent management of money and financial resources to achieve set goals effectively.

Operating Cash Flow

Cash generated from the core business operations of a company, excluding financing and investing activities.