FM related query

go for comparing the the NPV of different projects as the ultimate goal of financial mgt is wealth maximisation....

Calculate Annualized NPV of different project. 

Annualized NPV= NPV / Annuity Factor. This will help you to compare better.

Practically IRR is most used. But again this depends on the Company, Industry Practice and other factors.

Originally posted by : Faiz Ahmed
	Calculate Annualized NPV of different project.  Annualized NPV= NPV / Annuity Factor. This will help you to compare better.

yes the same question was asked this time in ipcc exams

Dear Vinay,

In case of conflict between different methods, choose NPV approach since it is expressed in absolute terms..

In case of life disparity go for equated annual benefit / cost approach as suggested by Mr.Faiz.

Regards

one should go for npv tech

if two projects have different lifes then go for annualised npv

Originally posted by : Sneha..sunshine..
	Originally posted by : Faiz Ahmed Calculate Annualized NPV of different project.  Annualized NPV= NPV / Annuity Factor. This will help you to compare better. yes the same question was asked this time in ipcc exams

yes it was about EAC, i never expected such and easy and simple prob from Capital budgeting