If we are comparing projects of unequal sizes (requiring unequal amounts of investment), screening methods like NPV are only good for deciding if a product or service is worth considering along with...




If we are comparing projects of unequal sizes (requiring unequal amounts of investment), screening methods like NPV are only good for deciding if a product or service is worth considering along with other valid opportunities. In that case, we have to use a ranking methodafter screening the projects. How do we do that?



For example, you have been given the following information: (n = 3; i = 10%)  How will you rank these projects?































Project R




Project S




Project T




Investment required




$13,000




$59,000




$89,000




Annual net cash flows




$6,000




$25,000




$43,000




99



Jun 08, 2022
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