Vinay Raja (student-IPCC) (704 Points)
30 November 2010
Sunshine
(Helping All)
(10575 Points)
Replied 01 December 2010
go for comparing the the NPV of different projects as the ultimate goal of financial mgt is wealth maximisation....
Faiz Ahmed
( Article Trainee)
(1731 Points)
Replied 01 December 2010
Calculate Annualized NPV of different project.
Annualized NPV= NPV / Annuity Factor. This will help you to compare better.
Bhargava Raju Dommaraju
(Chartered Accountant)
(24 Points)
Replied 01 December 2010
Practically IRR is most used. But again this depends on the Company, Industry Practice and other factors.
Sunshine
(Helping All)
(10575 Points)
Replied 01 December 2010
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
CA Manikandan Raghunath
( )
(609 Points)
Replied 01 December 2010
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
Arniv Sharda
(CA Final)
(3006 Points)
Replied 01 December 2010
one should go for npv tech
if two projects have different lifes then go for annualised npv
Vinay Raja
(student-IPCC)
(704 Points)
Replied 01 December 2010
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