Discussion Board 6 Teklu 1
Hewan N Teklu
BUSI 620-001
March 11, 2016
DR. Andrew Light
Liberty University
Discussion Board 6 Teklu 2
Question
1.
i. NPV
Project A= $145,000 – $125,000 = 20,000.
Project B= $ 102,000 – 85,000= $17,000.
Project A would be preferred over Project B.
ii. The profitability index of A is $145,000/$125,000= 1.16. The profitability index
of B is $102,000/$85,000=1.20. Project B would be preferred to Project A.
2. (a)
By definition, third-degree price discrimination is a pricing strategy where identical or
largely similar goods or services are transacted at different prices by the same provider in
