Choosing between Projects

Mutually exclusive choices and value

Capital rationing and the profitability index

Projects with unequal lives

The decision framework assembled

Two mutually exclusive projects differ in scale, and the smaller one has the higher IRR while the larger has the higher NPV. Which should the firm accept?

What does the crossover rate in an NPV profile comparison of two projects indicate?

Under single-period capital rationing with divisible projects, how should the firm rank its opportunities?

Why does the lesson treat chronic capital rationing with suspicion?

Why can't a five-year machine and a ten-year machine be compared by raw NPV?

A project's NPV is 11,908 dollars over three years at a 10 percent cost of capital, with an annuity factor near 2.4869. Approximately what is its equivalent annual annuity?

What two-word term names the ratio of a project's present value of inflows to its initial cost, used to rank under rationing? Answer in lowercase.

What two-word term names the discount rate where two projects' NPV profiles intersect? Answer in lowercase.

What three-word term names the constant annual amount with the same present value as a project's NPV? Answer in lowercase.

What two-word term names the method of comparing unequal-life projects over a common multiple horizon with repetitions? Answer in lowercase.