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Two alternatives A and B have the following cash flows.
Year : 0 1 2 3 4
Option A : −Rs. 1,500, +Rs. 600, +Rs. 600, +Rs. 600, +Rs. 600
Option B : −Rs. 2,700, +Rs. 100, +Rs. 100, +Rs. 100, +Rs. 100
At a 6% interest rate, which alternative should be selected?
B because the NPW of A is negative
A because the NPW of A is greater than the NPW of B
A because the NPW of B is greater than the NPW of A
B because the NPW of B is greater than the NPW of A
B because the NPW of B is greater than the NPW of A
Practice and solve "Two alternatives A and B have the following cash flows. Year : 0 1 2 3 4 Option A : −Rs. 1,500, +Rs...." for Electrical - Economics for Engineers. The correct answer is Option D: B because the NPW of B is greater than the NPW of A. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.
Option **(d) **