A company is trying to decide between two independent projects. Each project has a cost of capital of 12%. Project A has an IRR

Question

3 years ago

14

of 11.4%. Project B has an IRR of 11.1%. Which project should the company choose if the goal of the firm is to maximize shareholder wealth

1 answer:

Rina8888 [55] · Answer 1 · 2022-03-18T00:38:08+03:00

Answer:

Neither project should be chosen

Explanation:

Given that

Each project cost of capital is 12%

The IRR of project A is 11.4%

And, the IRR of project B is 11.1%

As we can see that the cost of capital of each project with their internal rate of return so no project should be selected

Therefore the above statement represent an answer

The same should be relevant