You are considering two independent projects with the following cash flows. The required return for both projects is 10 %. Given this information, which one of the following statements is correct?
A) You should accept project A since it has the higher IRR and reject project B because you cannot accept both projects.
B) You should accept project A because it has the higher NPV and reject project B.
C) You should accept project B because it has the higher NPV and reject project A.
D) You should accept project B because it has the higher IRR and reject project A.
E) You should accept both projects based on both the NPV and IRR rules.

Question

You are considering two independent projects with the following cash flows. The required return for both projects is 10 %. Given this information, which one of the following statements is correct?  
A) You should accept project A since it has the higher IRR and reject project B because you cannot accept both projects. 
B) You should accept project A because it has the higher NPV and reject project B. 
C) You should accept project B because it has the higher NPV and reject project A. 
D) You should accept project B because it has the higher IRR and reject project A. 
E) You should accept both projects based on both the NPV and IRR rules.

Quizplus · Accepted Answer

The Answer of You are considering two independent projects with the following cash flows. The required return for both projects is 10 %. Given this information, which one of the following statements is correct?  
A) You should accept project A since it has the higher IRR and reject project B because you cannot accept both projects. 
B) You should accept project A because it has the higher NPV and reject project B. 
C) You should accept project B because it has the higher NPV and reject project A. 
D) You should accept project B because it has the higher IRR and reject project A. 
E) You should accept both projects based on both the NPV and IRR rules.

You Are Considering Two Independent Projects with the Following Cash