-An investor is considering the two investments shown above. Which of the following statements about these investments is true?
A) The investor should take investment A since it has a greater net present value (NP
V).
B) The investor should take investment A since it has a greater internal rate of return (IR
R).
C) The investor should take investment B since it has a greater net present value (NP
V).
D) Neither investment should be taken since they both have a negative net present value (NP

Question

-An investor is considering the two investments shown above. Which of the following statements about these investments is true?
A) The investor should take investment A since it has a greater net present value (NP
V). 
B) The investor should take investment A since it has a greater internal rate of return (IR
R). 
C) The investor should take investment B since it has a greater net present value (NP
V). 
D) Neither investment should be taken since they both have a negative net present value (NP

Quizplus · Accepted Answer

D) Using a financial calculator, NPV(A) = -$0.01906 million, IRR(A) = 7.56%,
NPV(B) = -$0.014567, IRR(B) = 6.46%;
Comparison of NPV is used to decide between mutually exclusive projects.

-An Investor Is Considering the Two Investments Shown Above