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How do financial managers evaluate capital budgeting proposals?

I'm writing a paper for business class and the question says Explain how financial managers evaluate capital budgeting proposals and what key issues are involved in determining a firm's capital structure, i have a little bit of information to go off of but anyone have another idea i can go off of? thanks

Well, the real answer is that they calculate the net present value of the different proposals based on initial cash outflows and estimated cash inflows. If the NPV is less than zero, the project should be rejected.



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