Question: You are considering the choice between two mutually exclusive projects. Project A requires an initial investment of $1 million. It has an NPV of $200,000

You are considering the choice between two mutually exclusive projects. Project A requires an initial investment of $1 million. It has an NPV of $200,000 and an IRR of 18.0 percent. Project B requires an initial investment of $20 million, with an NPV of $450,000 and an IRR of 10.0 percent. Based on this information, which of the following is most correct?

		You should choose Project B because it has the higher NPV.
		You should choose Project A because it has the higher IRR.
		Both projects are equally desirable.
		Neither project is acceptable; reject both.

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