Question

A company evaluates two mutually exclusive projects, A and
B. Project A has an NPV of ₹3.5 crore and an IRR of 13%. Project B has an NPV of ₹3.2 crore and an IRR of 16%. The company’s cost of capital is 10%. Which of the following statements is most appropriate?

A Project B should be selected based on IRR superiority
B Project A should be selected as it adds more value
C Both projects can be selected
D IRR is a better decision rule; hence Project B
E NPV and IRR are always consistent in ranking
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