Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

If we are evaluating two similar projects project A has: NPV $11,000 IRR %16.2 PB 3.4 DPB 3.95 PI 1.04 project B has: NPV $3,400

If we are evaluating two similar projects
project A has:
NPV $11,000
IRR %16.2
PB 3.4
DPB 3.95
PI 1.04
project B has:
NPV $3,400
IRR %19.5
PB 2.5
DPB 3.43
PI 1.09
Question: which project should I choose and why?
(From what I know NPV is the best investment appraisa, but in this case do I choose A just because it has higher NPV or project B that has better values for all other criterion?)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Options Futures And Other Derivatives

Authors: John Hull

11th Global Edition

1292410655, 9781292410654

More Books

Students also viewed these Finance questions