Question

Net present value is only a financial and economic criterion for selecting a project. What other factors may be important in accepting the project?

Answer 1

Other factors that are important in accepting the project:
1. The calculation of Cost of capital or WACC is another important factor.
2. The scale of the project and the amount of initial investment also plays an important role. Profitability index is another factor which can tell us about the scale of the project.
3. The affect of the project on other projects is another factor to check . This phenomenon is called cannibalization.

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