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Both projects have a positive net present value

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Consider two conventional (i.e., normal cash flows) projects, A and B. Project A has an internal rate of return (IRR) of 17 percent. Project B has an IRR of 23 percent. Both projects have a cost of capital of 18 percent. Which of the following statements is most correct?

  • Both projects have a positive net present value (NPV).
  • Project A must have a higher NPV than Project B.
  • Project A has a negative NPV while project B has a positive NPV.
  • Accept both projects
  • Statements a, b, and c are correct.

Reference no: EM132345853

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