You are going to choose between two investments. Both cost $50,000, but investment A pays...
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You are going to choose between two investments. Both cost $50,000, but investment A pays $25,000 a year for three years while investment B pays $20,000 a year for 4 years. If your required return is 12%, which should you choose?
A.
A because it has a higher IRR.
B.
B because its IRR exceeds 12%
C.
B because it has a higher NPV.
D.
A because it pays back sooner.
E.
A because its IRR exceeds 12%
You are going to choose between two investments. Both cost $50,000, but investment A pays $25,000 a year for three years while investment B pays $20,000 a year for 4 years. If your required return is 12%, which should you choose? A. A because it has a higher IRR. B. B because its IRR exceeds 12% C. B because it has a higher NPV. D. A because it pays back sooner. E. A because its IRR exceeds 12%
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