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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

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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
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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