Project Selection ( NPV)

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nazrulq
Contributor
Posts: 270
Joined: Sun Feb 26, 2017 6:06 am

Project Selection ( NPV)

Q. Project A has NPV \$ 500,000; Project B has NPV \$300,000; Project C NPV \$200,000 and Project D - 10%
What should be the opportunity cost if Project A has been selected?

1 \$500,000
2. \$ 300,000
3.\$ 200,000
4. -10%

Opportunity Cost is that one is not been selected. Project A has been selected. So the next one is \$300,000.

or What will be the answer if Project B or Project C is selected!

Rita and Saket's Video explains only two projects easy to select is that next to the order if multiple NPV IS GIVEN!
Can anybody explain?

Thanks
seema.sonkiya
Expert
Posts: 2201
Joined: Fri Jul 11, 2014 11:57 am

Re: Project Selection ( NPV)

If more tha n NPV is given then select two best projects where NPV is positive and has top two heigher values and then you see the opportunity cost
Posts: 1
Joined: Fri Oct 13, 2017 1:15 am

Re: Project Selection ( NPV)

So does than mean answer is \$300 + \$200 = \$500/- ? for this particular question