Question: Consider two projects, A and B, where Project A has an IRR of 18% and Project B has an IRR of 11%. Both projects have
Consider two projects, A and B, where Project A has an IRR of 18% and Project B has an IRR of 11%. Both projects have normal cash flows (i.e., a cash outflow in year O followed by cash inflows for all other years of the project) and the appropriate cost of capital for both projects is 14%. Which of the following statements is correct? 1) Both projects have a negative NPV. 2) There is not enough information provided to correctly answer this question 3) The NPV of Project A is greater than the NPV of Project B. 4) Both projects have a positive NPV. 5) The NPV of Project B is greater than the NPV of Project A
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
