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Project Selection ( NPV)

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Project Selection ( NPV)

Postby nazrulq Thu Jun 15, 2017 5:04 am

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.
Option 2 is my answer!

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?

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Joined: Fri Jul 11, 2014 11:57 am

Re: Project Selection ( NPV)

Postby seema.sonkiya Fri Jun 16, 2017 7:11 am

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

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