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NPV Decision

This topic has 3 replies, 2 voices, and was last updated 8 years ago by John Moffat.

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April 12, 2017 at 9:58 pm #381101
fazeel93
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sir if there is a situation where we have 2 options that we can either sell a building for profit or we could refurbish the area for a positive NPV project , which one would we choose?
April 13, 2017 at 6:21 am #381113
John Moffat
Keymaster
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Whichever gives the highest NPV!
April 13, 2017 at 9:01 pm #381259
fazeel93
Member
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Like sir in this question im getting a positive npv of 951,000 dollars however he can have the alternative of getting cash 1.5million dollars straight away right now so obviously cash is better right?
April 14, 2017 at 6:54 am #381285
John Moffat
Keymaster
- Topics: 57
- Replies: 54656
Right. The NPV of 1.5M dollars now is 1.5M dollars!!
(Are you watching my free lectures? They are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.)
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