considering two mutually exclusive projects, the firm should always select the project whose internal rate of return is the highest, provided the projects have the same initial cost This statement is true regardless of whether the projects can be repeated or not.

Question

Quizplus · Accepted Answer

The firm should select the project with the highest net present value (NPV), not necessarily the highest internal rate of return (IRR), as IRR can be misleading when comparing mutually exclusive projects.

Considering Two Mutually Exclusive Projects, the Firm Should Always Select