What is the NPV decision rule if you are choosing from mutually exclusive, proje

Question

What is the NPV decision rule if you are choosing from mutually exclusive, projects? (a) Select the project with the highest NPV, even if it is negative. (b) Select all positive-NPV projects. (c) Select the project with the highest NPV, as long as in is positive. (d) Select the project with the highest NPV, as long as the outlay is recovered within the payback period. The following table shows cash flow for two projects, A and B. Assuming the cost of capital is greater than zero and both NPVs are positive, which of these projects will have the higher NPV? (a) Project B (b) impossible to tell without knowing the cost of capital/discount rate (c) Both will have the same NPV (d) Project A Consider the diagram below, which shows the NPV profile projects, M and N. If the cost of capital is 12%, which project would you select? (a) Neither project (b) Project N (c) Project M (d) Both projects

Explanation / Answer

8 ans

option b

9 ans

option b impossible to tell without knowing the cost of capital/ discount rate

10 ans) option b project n has high percentage 60/15 =4 %

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.