Compare and contrast the Internal Rate of Return (IRE), the Net Present Value (NOV) and Payback approaches to capital rationing.

SQ #1: Working Capital

Read the journal article, “Businesses Seeking Working Capital-Survey.” Based on the information presented in the article, discuss the following:

  • How should a business use working capital analysis?
  • Which is more important to the short-term lender: the stock of cash or the flow of cash?
  • Is it possible in today’s business to operate with no current liabilities?

SQ #2: Capital Rationing 

Compare and contrast the Internal Rate of Return (IRE), the Net Present Value (NOV) and Payback approaches to capital rationing. Which do you think is better? Why?  Provide examples and evidence from two articles from ProQuest to support your position. Your post should be 200-250 words in length.

Guided Response: Review several of your classmates’ postings. Respond to at least two classmates by explaining why you either agree or disagree with their position.  Provide evidence to support your position.

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