Two companies examined the same capital budgeting project, which has an internal rate of return equal to

Question:

“Two companies examined the same project, which has an equal to 19 percent. One firm accepted the project, but the other firm rejected it. One of the firms must have made an incorrect decision.” Discuss the validity of this statement.

Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...