For a mutually exclusive project..which one did you guys pick one

lxwarr30

Payback, NPV, IRR?

JGovender

i dont remember the question exactly, but i chose IRR

MonkeyBusiness

I am very sure that if there is clash between choices for mutualy exclusive projects, NPV should be chosed. And if i remember correctly, the CF0 was same for alll projects which means that no doubt is left regarding NPV as the only choice.

Maddin

I lied I did put NPV....that is the better indicator

ramdabom

NPV of course, you've never taken corporate if you don't know that

koba

If it's independent = choose both projects as long as NPV >0 and IRR > discount rate (usually WACC)

If it's mutual = choose the project with the highest IRR and NPV so long as IRR > WACC and NPV > 0, but if the rank conflicting, use NPV instead because it calculates the net increase in the company value.

joemoran

It was a bit of a trick I think, but yes, NPV is the correct measurement tool.