Two mutually exclusive investment proposals have "scale differences" (i.e., the cost of the projects differ). Ranking these projects on the basis of IRR, NPV, and PI methods give contradictory results.

Related MCQs

• You are considering two mutually exclusive investment proposals, project A and project B. B's expected value of net present value is $1,000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that
• In mutually exclusive projects, projects which are selected for comparison must have
• Two mutually exclusive projects with different economic lives can be compared on the basis of
• To judge the comparative risk of projects having same cost and different NPV which method is used
• To judge the comparative risk of projects having same cost and same NPV which method is used
• The term mutually exclusive investments mean:
• In case of divisible projects, which of the following can be used to attain maximum NPV?
• The net cash flows of the project and their present values are as follows Year 1 2 3 4 Net cash flow (Rs) 5100 5100 5100 7100 PVIF @12% 0.893 0.797 0.712 0.636 Present Value (Rs) 4554 4065 3631 4516 The initial investment in the project is Rs12500, What is the NPV of the project?
• Present value of inflows Rs. 10 lakhs from a project and initial investment is Rs. 7.5 lakhs. The NPV is:
• While evaluating capital investment proposals, the time value of money is considered in case of