Use the table for the question(s)below. Consider the following two projects: -Assume that projects Alpha and Beta are mutually exclusive.The correct investment decision and the best rationale for that decision is to A)invest in project Beta,since NPV_Beta 0. B)invest in project Alpha,since NPV_Beta IRR_A. D)invest in project Beta,since NPV_Beta NPV_Alpha 0.

Question

Use the table for the question(s)below. Consider the following two projects: -Assume that projects Alpha and Beta are mutually exclusive.The correct investment decision and the best rationale for that decision is to A)invest in project Beta,since NPV_Beta > 0. B)invest in project Alpha,since NPV_Beta < NPV_Alpha. C)invest in project Beta,since IRR_B > IRR_A. D)invest in project Beta,since NPV_Beta > NPV_Alpha> 0.

Quizplus · Accepted Answer

The correct investment decision is to invest in project Beta since it has a higher positive Net Present Value (NPV) than project Alpha. Project Beta has an NPV of $1,050, which is greater than the NPV of project Alpha, which is -$400. Therefore, investing in project Beta is the better choice.

Use the Table for the Question(s)below