Question: When selecting between two options (that have the same given lifespan), you notice that one has a higher IRR but a lower net present value.

When selecting between two options (that have the same given lifespan), you notice that one has a higher IRR but a lower net present value. The other has a lower IRR but a higher net present value. If you are confident in your discount rate and the projects are short term, which one would you pick and why?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!