Question
ABC Ltd. is evaluating two projects. Project A requires ₹50 lakhs investment and offers IRR of 14%. Project B requires ₹40 lakhs and gives IRR of 12%. The cost of capital is 10%, but Project A has longer payback and higher risk. Which approach should guide the decision?
More Capital Budgeting Questions
- A pharmaceutical company is evaluating a project with a 15-year horizon. The management is concerned about the time value of money and the project's long g...
- As per the Union Budget 2024-25, the Long-Term Capital Gains (LTCG) tax rate under sections 112A and 112 has been revised to _____
- A firm evaluating two mutually exclusive projects uses NPV and IRR. Project A has higher NPV but lower IRR than Project B. Which project should be selected...
- Which of the following is/are examples of capital expenditure?
- According to the Trade-off Theory, firms balance:
- Project A requires investment of ₹10,00,000 with annual cash inflows of ₹3,00,000 for 5 years. Cost of capital = 10%. Compute Net Present Value (NPV). (PVI...
- In the context of working capital assessment, the Tandon Committee recommended that the borrower should bring in a minimum of what percentage of the total ...
- Profitability Index less than 1 indicates:
- Which statement is correct regarding Weighted Average Cost of Capital (WACC)?
- If two mutually exclusive projects have conflicting rankings under NPV and IRR, which method should be preferred?
Relevant for Exams:
Hey! Ask a query
Please enter email id
The email must be a valid email address.
Please enter Mobile Number
Please enter valid Mobile Number
Please enter your Doubt
