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QUESTION

Project Selection using IRR method

If the company has minimum rate of return standard as 10%, which of following project would you recommend to the company?

A) Investment in year 0, $40,000, r

eturns: $10,000 in year 1; $

11,000 in year 2; $12,000 in year

3; and $13,000 in year 4 and 5

B) Investment in year 0, $42,000, r

eturns: $13,000 in year 1; $

12,000 in year 2; $11,000 in year

3; and $10,000 in year 4 and 5

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