Question $40$

You are considering the choice between two mutually exclusive projects. Project A requires an initial investment of $$1$ million. It has an NPV of $$400,000$ and an IRR of $15\mathrm{.}0$ percent. Project B requires an initial investment of $$20$ million, with an NPV of $$450,000$ and an IRR of $16\mathrm{.}0$ percent. Based on this information, which of the following is most correct?

You should choose Project A because it has the higher IRR.

You should choose Project B because it has the higher NPV$.$

Both projects are equally desirable.

Neither project is acceptable; reject both.