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Net Present Value Problem

_9597

New Member
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?
 

Priyamwada

Well-Known Member
Simplilearn Support
Hi Participant,

We have received your query and have forwarded it to our subject matter expert.
Kindly allow us 24 hrs of time while we revert with the details.

Happy Learning!!
Priyamwada Singh - Global Teaching Assistant

 

tim jerome

Well-Known Member
Trainer
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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