In comparing two investments,a commonly used guideline is to accept the investment with the ____.
A) higher NPV
B) higher IRR
C) lower NPV
D) either a.or b.

Question

Quizplus · Accepted Answer

The decision between two investments should be based on both NPV and IRR, so the best choice is either A or B. A higher NPV indicates that the investment is expected to generate higher cash inflows than outflows, leading to a greater net gain for the investor. A higher IRR shows the rate of return on the investment, and the higher the IRR, the more desirable the investment is. Therefore, choosing either the investment with higher NPV or higher IRR would likely lead to a more profitable outcome for the investor.

In Comparing Two Investments,a Commonly Used Guideline Is to Accept