If the risk-free interest rate is 10%,then of the four projects listed,if could only invest in two of these projects,which two projects would you select?
A)Mighty & Eenie
B)Mighty & Meenie
C)Eenie & Moe
D)Eenie & Meenie

Question

Quizplus · Accepted Answer

A)Eenie & Mighty have the highest NPVs
NPV Eenie = -10 + 15/1.1 = 3.64
NPV Meenie = 10 - 8/1.1 = 2.73
NPV Mighty = -15 + 20/1.1 = 3.18
NPV Moe = 10 - 15/1.1 = -3.64

If the Risk-Free Interest Rate Is 10%,then of the Four