Question
About investment criteria. We have discussed about five investment criteria, including NPV, IRR, PI, AAR and Payback. a) Given that three projects are mutually exclusive
About investment criteria. We have discussed about five investment criteria, including NPV, IRR, PI, AAR and Payback.
a) Given that three projects are mutually exclusive and their information is as follows, which project to choose and why?
|
| Project A | Project B | Project C |
| NPV | $500,000 | $200,000 | $300,000 |
| IRR | 12% | 15% | 18% |
| PI | 1.5 | 2.0 | 1.6 |
b) Which two investment criteria do NOT take time value of money into the consideration?
c) List two exceptional cases that IRR is not reliable
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The Laymans Guide To Managing Your Investments
Authors: Thomas Dunleavy
1st Edition
979-8763592214
