When the Amount Invested Differs Substantially Across Projects, NPV Is

question 18

Essay

When the amount invested differs substantially across projects, NPV is of limited value for comparison purposes. You have evaluated three projects of substantially different investment amounts using the net present value (NPV) method. How would you decide which one of the projects to select?

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Definitions:

Job Rotation

A method where employees rotate between different jobs to learn new skills and gain exposure to various areas of an organization.

Job Enrichment

The process of enhancing a job's appeal by adding tasks that increase its scope, complexity, and responsibility to improve employee satisfaction and performance.

Therblig

A set of fundamental motions used in the analysis of the physical movements of workers in manual operations to improve efficiency.