Question
Suppose two Projects-X and Y- both costing Rs 500 each. Project A returns Rs 1000 after one year and Rs 250 after two years. On
Suppose two Projects-X and Y- both costing Rs 500 each. Project A returns Rs 1000 after one year and Rs 250 after two years. On the other hand, Project B returns Rs 300 after one year and Rs 1000 after two years. Calculate NPV of projects at discount rates of 5 per cent and 10 per cent. What happens to projects (NPV-based) rankings at these discount rates? Why there is difference in ranking
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Introduction To Institutions Management And Investments
Authors: Herbert Mayo
10th International Edition
1111820643, 9781111820640
