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Author Question: In general, where there is a conflict between two mutually exclusive projects, the NPV of a project ... (Read 44 times)

bvyeehaw

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on: Aug 7, 2023

Question 1

Humboldt Inc. is considering a project that has the following cash flow and WACC data. What is the project’s NPV?

WACC:10%     
Year:0

1

2

3

4

5

Cash flows:

–$1,000

$400

$400

$400

$400

$400


◦

$507.94


◦

$510.09


◦

$516.31


◦

$520.61



Question 2

In general, where there is a conflict between two mutually exclusive projects, the NPV of a project and its internal rate of return, in terms of making a go/no go decision, the conflict is resolved by which of the following rules?

◦

Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the higher MIRR.


◦

Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the higher IRR.


◦

Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the higher NPV.


◦

Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the shorter payback period.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by bvyeehaw on Aug 7, 2023

bball_babe_123

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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bvyeehaw

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Reply 2 on: Aug 7, 2023
Wow, this really help

xiazhe

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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