Hi All,

Can you please assist me in addressing this sample PMP exam question regarding Net Present Value (i.e. what is the key formula to solving)?

Thank you!
Justin

A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000.

The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project.