Which project should the company invest in

Reference no: EM13300046

American Steel Corporation is considering two investments. One is the purchase of a new continuous caster coasting $100 million. The expected net present value of this project is $20 million. The other alternative is the purchase of a supermarket chain, also costing $100 million. It too, has an expected net present value of $20 million. The firms management is interested in reducing the variability of its earnings.

a. which project should the company invest in?
b. what assumptions did you make to arrive at this decision?

Reference no: EM13300046

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