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Hello everyone,
Could you help me with the optimim investment decision, please?
All projects are divisible, two of them are mutually exclusive.
Is it possible that calculations of PI (PV/Initial onvestment) and NPV/Initial investment are going to give different results?
Consequently, there are different ranks and NPV of the combination as well.
The difference in NPV is not so huge, anyway, is it ok?Thanks in advance.
Best regards, Victoria
I think the following thread might help you even though it’s about capital rationing-
Thanks a lot!
I tried both variants, so there is the best one, when PI is used in the situation whith mutually exclusive projects.
Anyway, If I rank in according the the result of NPV/ Initial investment, there is other combination and other total NPV.What’s a pity there is no possibility to show a screenshot.
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