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You have a choice between 2 mutually exclusive investments. If you require a 15% return, which investment should you choose? Year A B 0
You have a choice between 2 mutually exclusive investments. If you require a 15% return, which investment should you choose? Year A B 0 -100,000 -125,000 1 20,000 75,000 4 2 40,000 45,000 3 80,000 40,000 A) Project A, because it has a smaller initial investment. B) Project B, because it has a higher NPV of $544 as compared to NPV of $238 for project A. C) Either one, because they both pay back within three years. D) Project A, because it has the higher internal rate of return of 20% as compared to 17% for Project B. E) Project A, because it has higher NPV and IRR as compared to Project B.
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