Question
Suppose that as a financial analyst, you are in charge of selecting the best investment capital budgeting project for the company you work for. A
Suppose that as a financial analyst, you are in charge of selecting the best investment capital budgeting project for the company you work for. A set of capital budgeting investment opportunities below shows the net investment and the net cash flows of the different but same scale capital budgeting projects:
Year | Project #AA | Project #BB |
0 | -$1,000 | -$10,000 |
1 | $1,500 | $13,000 |
Since you can only select one of the project investments presented in the data table above, which one looks better depending on NPV and PI decision models (use 10.00% as the minimum required rate of return)?
Group of answer choices
Project AA
Projects AA and BB have the same investment return so both of them
Neither of the projects
Project BB
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