Answer to Question #268223 in Financial Math for tate

Question

You must choose between two investments, G and W. The profitability index (PI), net present value (NPV) and internal rate of return (IRR) of the two investments are as follows:

Criteria Investment G Investment W

NPV –12 000 40 000

PI 0,985 1,053

IRR 20% 24%

Which investment(s) should you choose, considering all the above criteria, if the cost of capital is equal to 21% per year?