Investment projects A and B offer equal cash inflows over their lives,but the cash inflows for project A occur sooner than those for project B.The two projects are otherwise identical (the cost is the same,for example).Based on this information,the internal rate of return for A is lower than for B.

Question

Quizplus · Accepted Answer

The internal rate of return (IRR) for project A would be higher because receiving cash inflows sooner increases the present value of those cash inflows, making the investment more attractive compared to project B where cash inflows occur later.

Investment Projects a and B Offer Equal Cash Inflows Over