Using appropriate financial analysis tools, your company has identified several independent projects that will add value to the company. Unfortunately, the company has an insufficient capital budget to undertake all of the projects and management has declined additional debt or equity financing efforts to increase the capital budget. What recommendation would you make for selecting the appropriate projects?
You used the Excel NPV function with the correct discount rates to calculate NPV and you got the following values: Buy – $363,562; Lease – $464,317. You confirm the correct discount rate was used. What did you do wrong?