2Capital budget analysis of mutually exclusive projects A and B yields the following:

Project A Project B

IRR 18% 22%

NPV $270,000 $255,000

payback 2.5 years 2.0 year

period

management should choose:

a) project B because most executives prefer the I{R method

b)project B because two out of three methods choose it

c) project A because NPV is the best method

d) either project because the results aren't consistent