In general, if two mutually exclusive projects are being compared and one has higher NPV than...
In general, if two mutually exclusive projects are being compared and one has higher NPV than the other, but other one has higher IRR which one should the company choose?
A. the one with the higher NPV
B. The one with the higher IRR
Homework Answers
A. the one with the higher NPV
When projects are mutually exclusive, we always choose the project with the higher NPV. This is because NPV shows the return in dollar terms.
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PLEASE SHOW WORK AND CALCULATIONS THANKS
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