Question
You analyze two mutually exclusive projects and get the following results: Project A: NPV: $1,000,000; IRR: 10%; discounted payback: 4 years. Project B: NPV: $250,000;
You analyze two mutually exclusive projects and get the following results:
Project A: NPV: $1,000,000; IRR: 10%; discounted payback: 4 years.
Project B: NPV: $250,000; IRR: 15%; discounted payback: 3.5 years.
The companys discount rate is 8% and its discounted payback limit is 3 years. Which project should you select or recommend?
| A. Project A because it has the higher NPV | ||
| C. Project B because it has the higher IRR and the lower discounted payback period | ||
| D. Neither because their discounted payback periods are too high | ||
| B. Project B because it has the higher IRR |
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Environmental Finance And Investments
Authors: Marc Chesney, Jonathan Gheyssens, Anca Claudia Pana, Luca Taschini
2nd Edition
366248174X, 978-3662481745
