Suppose project A has an IRR of 10 percent and project B has an IRR of 20 percent.One can then conclude that:
A) Project A is preferred to B
B) Project A has a negative NPV while project B has a positive NPV.
C) Project B has a negative NPV while project A has a positive NPV.
D) It is impossible to rank the two projects without further information.

Question

Quizplus · Accepted Answer

The IRR alone does not provide enough information to rank projects; the NPV and cost of capital are also needed.

Suppose Project a Has an IRR of 10 Percent and Project