Discussion Post: CAPITAL BUDGETING (PRINCIPLES & TECHNIQUES)
To avoid damaging its market value, each company must use the correct discount rate to evaluate its projects. Review and discuss the following:
a) Compare and contrast the internal rate of return approach to the net present value approach. Which is better? Support your answer with well-reasoned arguments and examples.
b) Is the ultimate goal of most companies--maximizing the wealth of the owners for whom the firm is being operated--ethical? Why or why not?
c) Why might ethical companies benefit from a lower cost of capital than less ethical companies?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.