Assume that there are two competing projects: (mathrm{A}) and (mathrm{B}). Project (mathrm{A}) has a net present value
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Assume that there are two competing projects: \(\mathrm{A}\) and \(\mathrm{B}\). Project \(\mathrm{A}\) has a net present value of \(\$ 1,000\) and an internal rate of return of 15 percent; Project \(B\) has a net present value of \(\$ 800\) and an internal rate of return of 20 percent. Which of the following is true?
a. It is not possible to use NPV or IRR to choose between the two projects.
b. Project \(B\) should be chosen because it has a higher IRR.
c. Project A should be chosen because it has a higher NPV.
d. Neither project should be chosen.
e. None of the above.
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Related Book For
Fundamental Cornerstones Of Managerial Accounting
ISBN: 9780333623183
1st Edition
Authors: Dan L. Heitger, Maryanne M. Mowen, Don R. Hansen
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