Question
TT Inc. is considering two projects. Assuming that Projects A and B are mutually exclusive , which recommendation may be the most reasonable for a
TT Inc. is considering two projects. Assuming that Projects A and B are mutually exclusive, which recommendation may be the most reasonable for a person trained in Finance if the WACC is 5%?
| Project | NPV | IRR | Payback Period |
| A | $4.5 million | 4.66% | 3.6 years |
| B | $3.8 million | 6.33% | 4.1 years |
| a. | Accept Project Bogata because of the highest IRR that is greater than the WACC. | |
| b. | Accept Project Bogata because of the highest IRR and positive NPV. | |
| c. | Accept both A and B as long as their NPVs are positive. | |
| d. | Accept Project Aliga because of the IRR and the shorter Payback period. | |
| e. | Accept Project Aliga because of the highest Net Present Value Figures. |
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On My Own Two Feet A Modern Girls Guide To Personal Finance
Authors: Sharon Kedar
2nd Edition
1440570841, 978-1440570841
