Answer to Question #217869 in Finance for Beauty Magadlela

Question

Criteria Investment X InvestmentY

NPV R44 000 −R22 000

PI 1,945 0,071

IRR 16,00% 8,04%

Which investment(s) should you choose, taking all the above criteria into consideration, if the cost of capital is equal to 12% per year? [1] X [2] Y [3] Both X and Y [4] Neither X nor Y [5] Too little information to make a decision

Answer 1

In this case, the project X has more NPV and IRR and we choose the project X.

Answer [1]