Project a Has an NPV of $20,000 and a PI

question 82

Multiple Choice

Project A has an NPV of $20,000 and a PI of 1.2.Project B has an NPV of $10,000 and a PI of 1.3.Both projects have equal lives.Which project should be preferred if we are NOT concerned with capital rationing (that is,we are NOT concerned with being short of funds) ?

• A)We should prefer Project B since it has a higher PI.
• B)We should compute the EAA before we make any decision.
• C)We should prefer Project A since it has a higher NPV.
• D)We should prefer Project B if it has a higher IRR.

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Definitions:

Placebo Beverage

A drink given to participants in an experiment, which they believe contains active ingredients, but does not, used to measure psychological and physiological effects.

Casual Sex

Sexual activity that takes places outside the context of a serious relationship, often focusing on physical pleasure without emotional commitments or future expectations.

Alcohol

A chemical substance that is a central nervous system depressant and is consumed in beverages for its psychoactive effects, often leading to intoxication.

Women

Female human beings; also refers to issues, conditions, and perspectives specific to them, particularly in contexts of health, society, and rights.