Why the short-term project might be ranked higher under npv

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Reference no: EM131061182

Financial Management DB

"Capital Budgeting and Risk Analysis" Please respond to the following:

* From the e-Activity, analyze the reasons why the short-term project that you have chosen might be ranked higher under the NPV criterion if the cost of capital is high, while the long-term project might be deemed better if the cost of capital is low. Determine whether or not changes in the cost of capital could ever cause a change in the internal rate of return (IRR) ranking of two.

* From the scenario, take a position for or against TFC's decision to expand to the West Coast. Provide a rationale for your response in which you cite at least two capital budgeting techniques (e.g., NPV, IRR, Payback Period, etc.) that you used to arrive at your decision.

Reference no: EM131061182

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