There are four investment rules including payback period, internal rate of return, profitability index, and net present value. (15 marks)
a. State the criterion for accepting or rejecting independent projects under each rule. Briefly discuss the potential shortcomings of each rule.
b. What are some of the difficulties that might come up in actual applications of the various investment rules? Elaborate.
c. Which one would be the best investment rule to implement in actual applications? Explain.