Refer to the table below,which shows the results of payback,net present value,and internal rate of return analysis of four projects.Which is preferred by the internal rate of return criterion?
A) Project A
B) Project B
C) Project C
D) Project D

Question

Refer to the table below,which shows the results of payback,net present value,and internal rate of return analysis of four projects.Which is preferred by the internal rate of return criterion? 
A) Project A 
B) Project B 
C) Project C 
D) Project D

Quizplus · Accepted Answer

Project A has the highest internal rate of return (18%), which means it has the highest potential for profitability. However, it has the longest payback period (4 years) and the lowest net present value ($30,000). Therefore, while Project A may be the preferred choice by the internal rate of return criterion, it may not be the best overall choice if other factors such as time value of money and liquidity are also considered.

Refer to the Table Below,which Shows the Results of Payback,net