The Values of NPV for Four Projects Have Been Calculated

question 47

Multiple Choice

The values of NPV for four projects have been calculated as follows: Project A = £11m; Project B = 0; Project C = - £5m; Project D = - £12m. Which of the projects would you suggest should be adopted?

• A) Only Project A
• B) Projects A and B
• C) Project C and D
• D) Projects B, C and D

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Definitions:

FIFO Method

First-In, First-Out, an inventory valuation method where the oldest inventory items are sold or used first.