The following data was given for three projects being considered by Manosteel Ltd.Only one project can be accepted due to funding limitations.
$\begin{array}{llcc}
\text { Project } & \text { IRR } & \text { NPV } & \text { Payback } \
\text { A } & 16 \% & \$ 18,000 & 7 \text { yrs }\
\text { B } & 18 \% & \$ 100,000 & 5 \text { yrs } \
\text { C } & 15 \% & \$ 95,000 & 10 y \mathrm{rs}
\end{array}$
Which project is the best given that Manosteel's required rate of return is 14%?

Question

Quizplus · Accepted Answer

Project B is the best choice because it has the highest Internal Rate of Return (IRR) of 18%, which is greater than the required rate of return of 14%, and also has a high Net Present Value (NPV) of $100,000, indicating it will add the most value to the company. Additionally, it has the shortest payback period of 5 years, making it the most attractive investment option among the three.

The Following Data Was Given for Three Projects Being Considered