Use the table for the question(s) below.

-If the risk-free interest rate is 10%,then of the four projects listed,which project would you never want to invest in?
A) Eenie
B) Meenie
C) Minie
D) Moe

Question

Use the table for the question(s) below.
 
-If the risk-free interest rate is 10%,then of the four projects listed,which project would you never want to invest in?
A) Eenie 
B) Meenie 
C) Minie 
D) Moe

Quizplus · Accepted Answer

D) Moe has negative NPV
NPV Eenie = -10 + 15 / 1.1 = 3.64
NPV Meenie = 10 - 8/1.1 = 2.73
NPV Minie = -15 + 20 / 1.1 = 3.18
NPV Moe = 10 - 15 / 1.1 = -3.64

Use the Table for the Question(s) Below