Selection of Best Projects on Post-investment Values

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Question

Estimates of selected post-investment values for three independent investment projects are as follows:

Project 1          Sales:  $350 million     Earnings per share:  $1.70       P/E ratio: 16.0

Project 2          Sales:  $300 million     Earnings per share:  $1.60       P/E ratio: 17.5

Project 3          Sales:  $250 million     Earnings per share:  $1.50       P/E ratio: 19.0

Which project or projects should the firm select?

Summary

This question belongs to finance and discusses about post-investment values for three independent investment projects and to select best projects among them.

Total word count: 25

 

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