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Consider the two mutually exclusive projects below. What is the appropriate investment decision? Project A Project B Payback 3.4 4.4 NPV - 2.79 - 1.56
Consider the two mutually exclusive projects below. What is the appropriate investment decision?
| Project A | Project B |
Payback | 3.4 | 4.4 |
NPV | - 2.79 | - 1.56 |
IRR | 18.56 | 10.67 |
Select one:
a.
Accept B because of the higher NPV (negative value that is smaller in magnitude).
b.
Accept A because of the higher IRR.
c.
Reject both projects because both NPVs are negative.
d.
Accept A because of the shorter payback.
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