Compute the incremental IRR

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For the given cash flows below, assume the cash flow is the same in the next 2 years. Compute the NPV for each project, and compute the incremental IRR. Compare and explain why NPV always gives the correct decision.

Project Initial Investment Year 1 Cash Flow

A 500,000 125,000

B 500,000 120,000

Question: What is the best way to select a project that has resource restrictions? Explain.

Reference no: EM13953786

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