You are given the following data: 

Project Chiefs – NPV of +R100,000 over a 3 year period 

Project Pirates – NPV of +120,000 over a 3 year period 

Discount Rate – 10% 

a. If the company has limited funds and can only afford one of these projects, which one should they choose?

b. If the company had enough funds for both projects, should they invest in both?

c. If the discount rate was greater than 10%, would you expect the NPV’s of the two projects to be higher or lower than above? 

 d. Would the IRR of each of the above projects be greater or less than 10%? 

 e. If you are given two cost-based projects that have different lifespans to choose from, what analysis would you perform to compare them?

Answer rating: 100% (QA)

a Project Chiefs NPV 100000 Project Pirates NPV 120000 Since 120000 is higher than 100000 the compan... View the full answer