Net Present Value Problem

Discussion in 'Project Management' started by _9597, Nov 17, 2017.

  1. _9597

    _9597 New Member

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    If you have two project A & B with an NPV of 55k(project A) and 60k (project B) each, and a payback period of
    4 years for project A and 5 years for project B, which of the projects will you choose as a PM?
     
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  2. Priyamwada

    Priyamwada Well-Known Member
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    Hi Participant,

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  3. tim jerome

    tim jerome Well-Known Member
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    Hi!

    If you have two project A & B with an NPV of 55k(project A) and 60k (project B) each, and a payback period of
    4 years for project A and 5 years for project B, which of the projects will you choose as a PM?

    The NPV of A is less than B. The Payback Period of A is less than B.

    NPV places B more in favor, Payback Period places A in favor.

    Time constraints will demand we focus on Payback Period, Profitability requirements will enforce A's selection.

    If this were on a practice exam, you would look for telling information in the question, and look at the range and distribution of the answers.

    Do you have more information?
     
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