I was looking at the worksheet solution of Project SB01 and noticed that the NPV calculations under the 2 proposals of the CEO did not factor in the purchase price. Why so? Surely in order to calculate profit the actual purchase price has to considered. It is however factored in calculating the IRR however.
I think because NPV it self is used to calculate the purchase price. Whereas instructions clearly asks for IRR when we pay Base Price. So, I think this is done correctly. Thanks Saurabh
