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What is the purpose of using the payback method

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Reference no: EM131915040

1. In December 2014, 9-month futures on the Australian S&P/ASX 200 Index traded at 5,493. Spot was 5,478. The annual interest rate was 2.96% and the annual dividend yield was about 4.3%.

a. Based on the current spot price, what should be the futures price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

2. How should you choose the best capital budgeting projects under capital rationing?

What is the purpose of using the payback method?

Reference no: EM131915040

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