Capital Budgeting Decision Criteria

This video covers the following learning objectives:

1. Explain the purpose of capital budgeting in financial decision-making.
2. Apply Net Present Value (NPV) analysis using Excel.
3. Calculate and interpret the Internal Rate of Return (IRR) for project evaluation.
4. Determine the Payback Period and Discounted Payback Period using cumulative cash flows.
5. Compute the Profitability Index (PI) and interpret its use in capital rationing.
6. Compare and contrast capital budgeting metrics, including when to use each one.
7. Identify limitations and potential pitfalls of relying on a single decision criterion.
8. Build a comparative table of evaluation metrics to assess competing projects in Excel.