5/28Answered2. Multiple ChoicePreviousNextNPV of four similar projects is given below. \Based on the NPV technique of project evaluation, which project will you invest in? (Note: You can only invest in one project.)

Multiple Choice QuestionA company needs to choose between two investment opportunities. Project 1 has a cost of $500,000 and expected NPV of cash flows of $450,000. Project 2 has a cost of $800,000 and expected NPV of cash flows of $750,000. Using profitability index as the evaluation method, the company should choose:Multiple choice question.either project. Both are acceptable because the difference between cost and NPV is $50,000 for bothProject 2 because it has a higher NPVProject 1 because it has a higher indexProject 2 because it has a higher index

If you do not know the discount rate for a project, the right investment criterion to be used will be(1 Point)MIRRBCRIRRNPV

There are two projects: project A and project B. Each of the project has the cost of Rs 100,000 and cost of capital for each project is 12 percent. The project's expected net cash flows are as follows: Year Project A Project B 0 Rs (100,000) Rs (100,000) 1 65,000 35,000 2 30,000 30,000 3 30,000 30,000 4 10,000 10,000 a. Calculate NPV for each project. Which project or projects should be accepted if they are independent? b. Calculate IRR for each project. Which project should be accepted if they are mutually exclusive?

What is the NPV of a 6-year project that costs $100,000, has annual revenues of $50,000 and costs of $15,000? Assume the investment can be depreciated for tax purposes straight-line over 6 years, the corporate tax rate is 21%, and the discount rate is 14%.Question 4

IRRA company is looking for an opportunity to invest ₹1,500 crore, for which it has identified five independent projects. The cash flows and the initial investment requirement of these five projects are as follows (in ₹ crore):  Project 1 Project 2 Project 3 Project 4 Project 5Year 0 (Initial investment) -1,200 -1,500 -700 -700 -300Year 1 500 400 200 300 100Year 2 500 500 250 300 100Year 3 500 600 300 300 100Year 4 500 700 350 300 100Consider the rate of interest as 7.5%.Which of the following projects has the highest IRR ?Project 2Project 1Project 4Project 3Project 5