Question
Projects A and B are mutually exclusive and have normal cash flows. Project A has an NPV of $427 and Project B has an NPV
Projects A and B are mutually exclusive and have normal cash flows. Project A has an NPV of $427 and Project B has an NPV of $337. Project A has an IRR of 15% and Project B has an IRR of 10%. Which of the following statements is correct?
Project B would be selected instead of Project A because NPV x IRR is greater.
If the two projects are mutually exclusive, it is reasonable to pick either project given the information provided.
Project B would be selected if the MIRR was lower as well.
Project A would be selected instead of Project B.
Project B would be selected instead of Project A.
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
13th Edition
978-0134083308, 013408330X
