BBC Practitioner Practice Questions - APMG Better Business Cases Practitioner Exam

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A local authority is short-listing options for a leisure centre redevelopment. After applying Critical Success Factors, four options remain on the short list. The NPVs at 3.5% Green Book discount rate are as follows: Option A −£4.2 m, Option B −£3.8 m, Option C −£5.1 m, Option D −£3.8 m. Based solely on the monetary appraisal, which option or options should be identified as the preferred option?

Option A, because it has the third-lowest cost Option C, because it has the highest total investment Option B or Option D, because they share the lowest net present cost The option with the highest NPV cannot be determined from costs alone

Correct Answer:

Option B or Option D, because they share the lowest net present cost

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