You are trying to determine whether to accept Project A or Project B.These projects are mutually exclusive.As part of your analysis,you should compute the incremental IRR by determining the:
A)internal rate of return for the cash flows of each project.
B)net present value of each project using the internal rate of return as the discount rate.
C)discount rate that equates the discounted payback periods for each project.
D)discount rate that makes the net present value of each project equal to 1.0.
E)internal rate of return for the differences in the cash flows of the two projects.

Question

Quizplus · Accepted Answer

The incremental IRR is found by calculating the internal rate of return for the differences in the cash flows between the two projects. This helps in comparing the additional return expected from one project over another.

You Are Trying to Determine Whether to Accept Project a or Project