Question

You must choose between the two projects whose cash flows are shown below.
The projects have the same risk.
a. Compute the net present value (NPV) and the profitability index (PI) for the two projects. Assume a 10 percent discount rate.
b. Which of the projects is better according to each of the two methods?
c. What is the explanation for the differences in rankings between the NPV and
PI methods of analysis?
d. Which method is correct? Why?


$1.99
Sales1
Views66
Comments0
  • CreatedMarch 27, 2015
  • Files Included
Post your question
5000