mistake in may 2010 suggested answer of fm cap budgting

in may 2010 fm paper one question from cap budgting calculate npv discounted payback period and irr. 2 machine is given under consideration one life is 5 year and 2 ki life 6 year. This the mutually exclusive proposal. As per npv technique when mutually exclusive proposal is given and life of the proposal under consideration is nt same and both cash inflow and outflow is given than proposal having highes equvijant npv will be chosen bt in suggested only npv calculated nt equvilant npv plz help me ki kya main galat hun ya institute se mistake hui hai?
Replies (2)

In my opinion, u are right..it should not be NPV.

Dear Friend, In my opinion, when there are two mutually exclusive events,and also when the life of the projects are not same, for deciding the project, we should ascertain that by (i) Equated Annual Benefit Method or (2) Equated Cost Method. If there are sunk costs or no cost data available we can use EAB Method.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
22 September 2026
Account Assistant

Chirag P Shah & Co. Chartered Accountant

Pune

B.Com

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details
Company
09 September 2026
Chartered Accountant

Aviv Global Private Limited

Ahmedabad

CA

View Details
Company
09 September 2026
SENIOR AUDITOR & ACCOUNTS MANAGER

Anupam Parashar & Co.

Ghaziabad

CA Final

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details