Given our goals of firm value and shareholder wealth maximization, we have stressed the importance of NPV. Yet many financial decision makers at well-known firms continue to use less desirable measures (such as payback period) rather than more desirable measures (such as payback period and AAR, in addition to the NPV and IRR). Why do you think this is the case?

Given our goals of firm value and shareholder wealth maximization, we have stressed the importance of NPV. Yet many financial decision makers at well-known firms continue to use less desirable measures (such as payback period) rather than more desirable measures (such as payback period and AAR, in addition to the NPV and IRR). Why do you think this is the case?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter17: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 2Q: Modigliani and Miller assumed that firms do not grow. How does positive growth change their...

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