Question
A junior financial analyst tells you the following information on projects A and B. The NPV of project A is $5,000,000 and the NPV of
A junior financial analyst tells you the following information on projects A and B. The NPV of project A is $5,000,000 and the NPV of project B is $3,000,000. The IRR of project A is 16% and the IRR of project B is 22%. The required rate of return on both projects is 10%. Assuming projects A and B are mutually exclusive, which of the following is the best answer?
The financial manager should accept project A and reject project B.
The financial manager should accept project B and reject project A.
The financial manager should reject both project A and project B.
The financial manager should accept both project A and project B.
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Infrastructure Planning And Finance
Authors: Vicki Elmer, Adam Leigland
1st Edition
0415693187, 978-0415693189
