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A firm is evaluating two investment proposals. The following data is provided for the two investment alternatives. Initial Cash Flow IRR NPV @ 18% Project
A firm is evaluating two investment proposals. The following data is provided for the two investment alternatives.
|
| Initial Cash Flow | IRR | NPV @ 18% |
| Project 1 | $250m | 28% | $80m |
| Project 2 | $50m | 36% | $20m |
If the two projects are mutually exclusive, which project should the firm choose? What is the problem that the firm should be concerned with in making this decision?
| Project 1; discount rate | ||
| Project 2; discount rate | ||
| Project 1; project scale | ||
| Project 2; project scale |
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