Capital Budgeting

Project A

Project B

IRR

18%

22%

NPV

$270,000

$255,000

Payback Period

2.5 yrs

2.0 yrs

Management should choose:

A) Project B because most executives prefer the IRR method

B) Project B because two out of three methods choose it

C) Project A because NPV is the best method

D) either project because the results

Which should management choose?

 
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