In a recent article in this Journal, James Ramsey (1970) presents a new investment criterion for firm project selection which he claims is superior to the net present value approach. The two investment yardsticks can yield different rankings of prospective projects if either the capital costs or the time span of the projects being compared are not equal. When this is the case, he argues that there is "an inherent deficiency in the net present value approach. This approach ignores the time span over which the returns [from the project] are to be obtained and the amount of investment required to obtain a given return" (p. 1026). In contrast, he claims that his criterion "can be used unambiguously in comparing the relative profitabilities of alternative investment projects" (p. 1027). In the present comment it is argued that Ramsey's method is distinctly inferior to the net present value approach and can lead to the selection of projects which are less profitable to the firm than alternatives. Following Ramsey, define i as the market interest rate (presumably the rate at which the firm and individuals can borrow and lend in the market), the stream (R1 . . . Rn) as the returns over time (beginning one period hence at time 1) of the project under consideration, and C as the capital cost of the project. The net present value of the project equals the present value of the returns less the capital cost of the project, that is,