Project A has NPV = + $2,000, IRR = 12% and discounted payback period of 3 years. Project B has NPV = + $2,200, IRR = 11% and discounted payback period of 7 years Project C has NPV = + $4,000, IRR = 15% and discounted payback period of 4 years Project D has NPV = + $3,000, IRR 17% and discounted payback period of 4 years If the board of directors for the company has a priority of maximizing value to the company's asset portfolio in its selection of projects, which of the projects should be approved first? A. Project A B. Project BC. Project CD. Project D
Project A has NPV = + $2,000, IRR = 12% and discounted payback period of 3 years. Project B has NPV = + $2,200, IRR = 11% and discounted payback period of 7 years Project C has NPV = + $4,000, IRR = 15% and discounted payback period of 4 years Project D has NPV = + $3,000, IRR 17% and discounted payback period of 4 years If the board of directors for the company has a priority of maximizing value to the company's asset portfolio in its selection of projects, which of the projects should be approved first? A. Project A B. Project BC. Project CD. Project D
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 21P
Related questions
Question
![Project A has NPV = + $2,000, IRR = 12% and discounted
payback period of 3 years. Project B has NPV = + $2,200,
IRR = 11% and discounted payback period of 7 years Project
C has NPV = + $4,000, IRR = 15% and discounted
payback period of 4 years Project D has NPV = + $3,000,
IRR 17% and discounted payback period of 4 years If the
board of directors for the company has a priority of
maximizing value to the company's asset portfolio in its
selection of projects, which of the projects should be
approved first? A. Project A B. Project BC. Project CD.
Project D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faadf5bb9-2887-4bea-9bfb-3d60fa8eba96%2F1c8a2d85-d62b-4074-a1af-30dcb0f6dac1%2Fv9eofs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Project A has NPV = + $2,000, IRR = 12% and discounted
payback period of 3 years. Project B has NPV = + $2,200,
IRR = 11% and discounted payback period of 7 years Project
C has NPV = + $4,000, IRR = 15% and discounted
payback period of 4 years Project D has NPV = + $3,000,
IRR 17% and discounted payback period of 4 years If the
board of directors for the company has a priority of
maximizing value to the company's asset portfolio in its
selection of projects, which of the projects should be
approved first? A. Project A B. Project BC. Project CD.
Project D
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