1. NPV AND CAPITAL BUDGETING

If NPV is conceptually the best tool for capital budgeting, why do you think multiple measures are used in practice?

What is the relationship between the Profitability Index and the NPV? Are there any situations in which you might prefer one method over the other?

2. CAPITAL RATIONING

What is capital rationing? What types of capital rationing are there? What problems does capital rationing create for discounted cash flow analysis?