# Lara Fredericks is interested in two mutually exclusive investments. Both investments cover the same time horizon of

## Question:

a. What is the net present value of the first investment?

b. What is the net present value of the second investment?

c. Being mutually exclusive, which investment should Lara choose? Explain.

d. Which investment was relatively more risky? Explain.

Net Present Value

What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at...

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**Related Book For**

## Principles Of Managerial Finance

**ISBN:** 978-0136119463

13th Edition

**Authors:** Lawrence J. Gitman, Chad J. Zutter