Q39
Four alternative investment opportunities are available in a mining project each offering different revenues for the next two years as shown in the table. If the interest rate is 10% annually, which alternative provides the best investment opportunity based on the net present value? Case I Case II Case III Case IV Initial Investment (Rs.) 40,000 1,00,000 80,000 1,20,000 Return in Year 2 30,000 75,000 65,000 80,000 Return in Year 3 30,000 75,000 65,000 80,000
Four alternative investment opportunities are available in a mining project each offering different revenues for the next two years as shown in the table. If the interest rate is 10% annually, which alternative provides the best investment opportunity based on the net present value?
| Case I | Case II | Case III | Case IV | |
| Initial Investment (Rs.) | 40,000 | 1,00,000 | 80,000 | 1,20,000 |
| Return in Year 2 | 30,000 | 75,000 | 65,000 | 80,000 |
| Return in Year 3 | 30,000 | 75,000 | 65,000 | 80,000 |
A.
I
B.
II
C.
III
AnswerD.
IV
Answer: Option C
Solution
Answer: Option C
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