The best rule for choosing projects when a firm has a limited amount of funds is to accept the group of projects with the greatest combined ________.
A)number of projects
B)IRR
C)NPV
D)time to completion

Question

Quizplus · Accepted Answer

The best rule for choosing projects with a limited amount of funds is to accept the group of projects with the greatest combined NPV (net present value), which takes into account the time value of money and provides a dollar amount of the projects' profitability. IRR (internal rate of return) and time to completion are important factors to consider, but they do not give a clear indication of the profit potential of the projects. The number of projects alone is not a sufficient criterion for making investment decisions.

The Best Rule for Choosing Projects When a Firm Has