1. Capital budget analysis of mutually exclusive projects A and B Yields the following:
Project A Project B
IRR 18% 22%
NPV $270,000 $255,000
Payback Period 2.5 Yrs 2.0 Yrs
Management should choose:
A. Project B because most excutives prefer the IRR method
B. Project B because Two out of three methods choose it
C. Project A because NPV is the best method
D. Either project because the results aren't consistent