Project A has NPV = + $2,000, IRR = 12% and discounted payback period of 3 years. Project B has NPV = + $2,200, IRR = 11% and discounted payback period of 7 years Project C has NPV = + $4,000, IRR = 15% and discounted payback period of 4 years Project D has NPV = + $3,000, IRR 17% and discounted payback period of 4 years If the board of directors for the company has a priority of maximizing value to the company's asset portfolio in its selection of projects, which of the projects should be approved first? A. Project A B. Project BC. Project CD. Project D

Project A has NPV = + $2,000, IRR = 12% and discounted payback period of 3 years. Project B has NPV = + $2,200, IRR = 11% and discounted payback period of 7 years Project C has NPV = + $4,000, IRR = 15% and discounted payback period of 4 years Project D has NPV = + $3,000, IRR 17% and discounted payback period of 4 years If the board of directors for the company has a priority of maximizing value to the company's asset portfolio in its selection of projects, which of the projects should be approved first? A. Project A B. Project BC. Project CD. Project D

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 21P

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