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Case Study Lara Vs Carla . Dr Clive Vlieland-Boddy. Chap V : Making Investment decisions V. NPV or IRR?. Application / Case : Lara vs Carla – 2 projects consisting in investing in a machine that will provide cost savings (increasing productivity). Expected FCF are as follow :.
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Case Study Lara Vs Carla Dr Clive Vlieland-Boddy
Chap V : Making Investment decisionsV. NPV or IRR? • Application / Case : Lara vs Carla – 2 projects consisting in investing in a machine that will provide cost savings (increasing productivity). Expected FCF are as follow :
Chap V : Making Investment decisionsV. NPV or IRR? • Questions : which project should we choose? Use NPV, IRR, Profitability indexes and payback period as criteria to make your decision
Chap V : Making Investment decisionsV. NPV or IRR? • Answer NPV criteria : Carla wins shortly… (difference is only 37.8 €!)
Chap V : Making Investment decisionsV. NPV or IRR? • IRR : Lara wins
Chap V : Making Investment decisionsV. NPV or IRR? • Profitability index and Payback : still LARA
Chap V : Making Investment decisionsV. NPV or IRR? • Prof index, Payback : still LARA
Chap V : Making Investment decisionsV. NPV or IRR? • Conclusion :