NPV Cost Avoidance and Savings

Net Present Value (NPV)
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Akshay
Student (University)

NPV Cost Avoidance and Savings

I evaluating a capital expenditure project where 'stand alone' (location 1) the savings from the investment are low. Due to this, the NPV is low. And thus the project is not feasible.
However this project also leads to cost avoidance at another location 2.
Hence my question: Are we allowed to sum up the two:
1. Savings at location 1
2. Cost avoidance at location 2
To finally come up with the NPV and IRR of the project?
Thanks.

 

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