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Why is the coefficient of variation a better risk measure to

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1.What is the decision rule for accepting or rejecting proposed projects when using internal rate of return? 

2.What is capital rationing?  Should a firm practice capital rationing?  Why?

3.Explain how to resolve a “ranking conflict” between the net present value and the internal rate of return.  Why should the conflict be resolved as you explained?

4.Explain how to measure the firm risk of a capital budgeting project.

 

5.Why is the coefficient of variation a better risk measure to use than the standard deviation when evaluating the risk of capital budgeting projects?

Reference no: EM13505556

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