A Firm Is Considering Four Projects with the Following PIs,NPVs,and

question 90

Essay

A firm is considering four projects with the following PIs,NPVs,and Costs.Project A: PI of 1.3,NPV of $3,600,and cost of $12,000; Project B: PI of 1.4,NPV of $5,600,and cost of $14,000; Project C: PI of 1.5,NPV of $5,000,and cost of $10,000; Project D: PI of 2.1,NPV of $8,800,and cost of $8,000.Rank the projects from best to worst in terms of their NPVs.Now rank the projects from best to worst in terms of their PIs.

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Definitions:

Population Means

The average of a characteristic or measurement of interest for the entire population being studied.

Randomized Block Design

A statistical experimental design that groups similar experimental units into blocks to account for variability and then randomly applies treatments within each block.

Wage Rate

The amount of compensation a worker receives per unit of time or per task completed.

Factor

An element or variable that contributes to a result or outcome.