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$70,000
0.25
$80,000
0.25
What is the expected value of five employees you hire?
Salvatore's Chapter 15:
a) Discussion Questions: 7.
b) Problems: 8, 10, and spreadsheet problem 1.
Discussion Question 7:
a) When can the NPV and the IRR methods of evaluating
investment projects provide contradictory results?
b) How can this arise?
c) Which method should then be used? Why?
Problem 8: John Piderit, the general management of the
Western Tool Company, is considering introducing some
new tools to the company’s product line. The top
management of the firm has identified three types of tools
(referred to as projects A, B, and C). The various divisions of
the firm have provided the data given in the following table
on these three possible projects. The company has a limited
capital budget of $2.4 million for the coming year.