You Are Going to Choose Between Two Investments

Multiple Choice

You are going to choose between two investments. Both cost $80,000, but investment A pays $35,000 a year for four years while investment B pays $30,000 a year for five years. If your required return is 13%, which should you choose?

A) A, because the pays back sooner.
B) A, because the IRR exceeds 13%.
C) A, because the project has a higher IRR.
D) B, because the IRR exceeds 13%.
E) B, because it has a higher NPV.