Question

ABC Ltd. is evaluating two projects. Project A requires ₹50 lakhs investment and offers IRR of 14%. Project B requires ₹40 lakhs and gives IRR of 12%. The cost of capital is 10%, but Project A has longer payback and higher risk. Which approach should guide the decision?

A Choose Project B for lower risk
B Choose Project A for higher IRR
C Base decision on NPV, not just IRR
D Reject both if risk is present
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