KK, a question

Submitted by sspawar on Thu, 07/12/2012 - 08:24

You are a project manager and sponsor has given you a liberty to choose a project among A and B and You have preferred A because it has
A. Higher IRR, NPV, Opportunity cost, and BCR
B. Higher IRR, NPV, payback, and BCR
C. Higher NPV, ROI, and BCR
D. Higher EVA , Opportunity cost, and payback

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Zephyr

Thu, 07/12/2012 - 08:41

 Answer is 'C' -  NPV, IRR, BCR should be high, Payback period should be less, and oppurtunity cost does not ideally qualify as a criteria for project selection. Please advice.

rrbhandare

Thu, 07/12/2012 - 08:59

Answer should be option "C".


 


Regards


Rajendra

krantikumar50

Thu, 07/12/2012 - 09:05

Respected Pawarji Sir,


 


The answer is an obvious "C".


I dont think opportunity cost is even taken for consideration. That takes out option A and D.  am learning the art of elimination, thanks to you respected Pawarji Sir.


 


Now, we have B and C. So, I would go with "C", respected Pawarji Sir.


 


Rest on you to unravel the mystery respected Pawarji Sir.


 


Warmly, KK....

sspawar

Thu, 07/12/2012 - 11:55

you are right

 opp cost should not be higher- because it is cost of left over option that is project B.

if project A has higher opp cost means cost  of project A is lower than cost of B, project B is better.

paybacktime should not be higher