A company is deciding whether to invest in one of two mutually exclusive projects with positive NPV.if project 1 has a higher npv but a lower irr than prjext 2 the company should 1. prefer project 1 2. prefer project 2 3.be indeifferent between project 1 and project 2
Finance
ScanSolve AI Answer
When choosing between mutually exclusive projects, the Net Present Value (NPV) rule is generally preferred over the Internal Rate of Return (IRR) rule, especially when they give conflicting rankings. NPV directly measures the increase in shareholder wealth.
Therefore, the company should prefer Project 1.
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