Question: If we are evaluating two similar projects project A has: NPV $11,000 IRR %16.2 PB 3.4 DPB 3.95 PI 1.04 project B has: NPV $3,400

If we are evaluating two similar projects

project A has:

NPV $11,000

IRR %16.2

PB 3.4

DPB 3.95

PI 1.04

project B has:

NPV $3,400

IRR %19.5

PB 2.5

DPB 3.43

PI 1.09

Question: which project should I choose and why?

(From what I know NPV is the best investment appraisa, but in this case do I choose A just because it has higher NPV or project B that has better values for all other criterion?)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Chapter 11. The Basics of Capital Budgeting This spreadsheet model is designed to be used in conjunction with the chapter's integrated case and the related PowerPoint slide presentation. You recently...

Please answer this question.. Very easy. -What sources of value most plausibly account for the differences between buyer and seller? -Structure and execute a discounted cash flow valuation of all of...

Please do these questions: -What sources of value most plausibly account for the differences between buyer and seller? -Structure and execute a discounted cash flow valuation of all of the MW...

I need assistance in completing the open ended portion that could be found on the last page of the pdf file. Part A most importantly is what I need assistance with, the data that needs to be...

Hi Akshya, plz find the attachments and let me know if you can help me in completing the finance problems in worh or excel formats. FINA 6301 HW Problems - 10TH Edition Chapters 10 and 11 - Session 8...

Cases 24 & 25 Victoria Chemicals This week we will be doing a Capital Budgeting case.We will combine Case 24 and 25 into one long case where Victoria Chemicals will be dealing with a Mutually...

Recently Santa Fe, New Mexico, was named one of the safest places to live in the United States. Since then housing development projects have been springing up all around Santa Fe. Six housing...

1) A project has a net present value of zero. Given this information: A) the project has a zero percent rate of return. B) the project requires no initial cash investment. C) the project has no cash...

3. Develop a budget to construct a burger restaurant in Indianapolis, IN. The building will be 5,800 SF with wood frame and wood siding. Include the cost of a 10'x10' walk-in refrigerator, one range,...

Questions: 1. Based on the base case scenario below what would the fixed model in Excel look like? Chapter Monte Carlo Simulation with Crystal Ball 380 Case Study 3 : Little Judson Prospect October...

When should property, plant and equipment be derecognised?

What does the selectivity coefficient tell us? Is it better to have a large or a small selectivity coefficient?

7. Use the quantity equation to explain why money growth and inflation tend to be closely linked.

What is the importance of the system safety function to an organization?

3.37 It was estimated that 30% of all seniors on a campus were seriously concerned about employment prospects, 25% were seriously concerned about grades, and 20% were seriously concerned about both....

3.31 A student committee has 6 members4 undergraduate and 2 graduate students. A subcommittee of 3 members is to be chosen randomly so that each possible combination of 3 of the 6 students is equally...

3.35 A work crew for a building project is to be made up of 2 craftsmen and 4 laborers selected from a total of 5 craftsmen and 6 laborers. a. How many different combinations are possible? b. The...