Conflicting rankings between NPV-IRR and PI

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Reference no: EM132062758

1. Which of the following will lead to conflicting rankings between NPV, IRR and PI?

a. mutually exclusive projects of different sizes

b. mutually exclusive project with time disparity in the future cash inflows

c. Projects with multiple sign changes within the set of cash flows

d. all of the above

2. Austin's portfolio has an expected return of 21% and a beta of 1.5. Anahi's portfolio has an expected rate of return of 11% and a beta of 0.8. The risk-free rate is 2%. According to the Treynor measure,

A) Austin has the better portfolio.

B) Anahi has the better portfolio.

C) The portfolios are equally desirable.

D) The answer depends on Austin's and Anahi’s risk tolerance.

Reference no: EM132062758

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