Respond to each question with a minimum of 125 Words:

 

• If you were going to use either IRR or NPV to help choose between one house or one car over another, which one do you believe would give you the most reliable answer.  (Hint: You probably would only use NPV for a lease versus buy analysis on a vehicle which is known as an NAL analysis/model).

• Why are ratios by themselves and looking at them for only one company for a particular year not a good enough measure to look at when analyzing a company or a business?  What else would you need to look at in addition to the current year ratios of the company you are evaluating?