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An individual is trying to decide whether to use internal rate of return (IRR) or net present value (NPV) to choose between two different projects.
An individual is trying to decide whether to use internal rate of return (IRR) or net present value (NPV) to choose between two different projects. Project A has an NPV of $25,000 and an IRR of 8%, while project B has an NPV of $10,000 and an IRR of 12%. Project Bs cash flows are spread out evenly over the life of the project, while project As cash flows all are received at the end of the project. Which project should the individual choose and why?
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