Question
A company is thinking whether to buy a new machine or
build a new machine itself in the factory. The following information is available about the two projects: A.    NPV of buying new machine = Rs. 23,000 B.    NPV of building new machine = Rs. 61,000 The company should accept which of these two projects?Solution
We should the project with higher NPV. Higher NPV helps in maximizing the wealth of shareholders.
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