Which project would have been recommended by Mr. Harsh? Explain whether his opinion will change, if coefficient of variation is used as a measure of…

On the basis of standard deviation project Dehradun Plant be chosen because it is less risky than Project Borsad Plant having higher standard deviation. Decision on the basis of CV: CV of project Dehradun Plant = SD/ENPV = 1,80,00,000/ 2,44,00,000 = 0.738 CV of project Borsad Plant = 2,40,00,000/4,50,00,000 = 0.533 On the basis of Co-efficient of Variation (C.V.) Project Dehradun Plant appears to be riskier and hence, project Borsad Plant should be accepted.