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QUESTION
Capital budgeting analysis of mutually exclusive projects A and B yields the following: _____Project A_________Project B IRR.18%...
IRR.....18% >>>>>>>>>>>>22%
NPV.....$270,000 >>>>>>>>$255,000
Payback...2.5 yrs >>>>>>>>>2.0 yrs
Period
Management should choose:
Project B because most executives prefer the IRR method
Project B because two out of three methods choose it
Project A because NPV is the best method
either project because the results aren't consistent
