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Business
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Number of pages / Number of words: |
3 / 768 |
Essay's paper body
higher return) than investment B.
e)
- Ignore the payback method, as it does not take into account the time value of cashflows and their riskiness.
- Both the Profitability Index method and NPV method indicate that Investment A is superior to Investment B.
- The IRR for both investments exceed the required return of 15% and will result in positive NPV (maximises shareholdersâ wealth)...
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higher return) than investment B.
e)
- Ignore the payback method, as it does not take into account the time value of cashflows and their riskiness.
- Both the Profitability Index method and NPV method indicate that Investment A is superior to Investment B.
- The IRR for both investments exceed the required return of 15% and will result in positive NPV (maximises shareholdersâ wealth)...
Essay fragment
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