More Complex NPV Comparison: Interrelated Projects

Net Present Value (NPV)
Knowledge Center

 
Net Present Value (NPV) > Best Practices

Sign up


Rob
How would I compare 3 projects - two have an NPV = $500,000 (over 9 years mixed stream of inflows and 20 years annuity, respectively) and one which is a lump of $490,000 cash right now? (...) Read more? Sign up for free

  Michel de Baar
Senior Manager Business Development, Netherlands
 

NPV Comparison

If a project has a positive NPV, this means that the project has already returned the discount rate (when NPV is 0, the discount rate is already returned) and if you get additional NET funds out of the project, it seems to me more interesting to go for a project with a positive NPV and on top of it is even higher (not much) than the cash payment. Seems to me like you would have to choose all the project(s).

 

More on Net Present Value (NPV)
Summary
Forum
NPV of $1 Million for a Project Means What
WHEN to Invest? Investing at the Right Moment...
Calculating NPV with Missing Data
How do you Calculate NPV when Initial Investments are Unknown?
Example of Net Present Calculation
NPV of Partial Payments
Missed Interest in NPV
NPV assumes Certainty of Cash Flows
Calculating Cost per Unit if Zero NPV without any Operating Costs Information
Calculating NPV for a Project
NPV Cost Avoidance and Savings
NPV for Leased Equipment versus Purchased Equipment
NPV with a Missing Cash Flow Figure
🔥NPV with Only Costs & IRR
Best Practices
Re-evaluating an investment decision
Operating Cash Flows
Does the Net Present Value (NPV) calculation uses cash inflows or profits?
Choosing between Investments Using a Comparison of NPVs
More Complex NPV Comparison: Interrelated Projects
Special Interest Group

Are you interested in Net Present Value (NPV)? Sign up for free

Notify your students

Copy this into your study materials:

and add a hyperlink to:

Link to this discussion

Copy this HTML code to your web site:


Net Present Value (NPV)
Knowledge Center

 


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2021 12manage - The Executive Fast Track. V15.8 - Last updated: 25-2-2021. All names of their owners.