Byron Davila

Business

12 May, 21:10

You are evaluating the following two investment opportunities:

Project A: This project requires $2,000 upfront, and pays you $500 at the end of each of the first 2 years, and an additional lump-sum of $1200 at the end of year 3.

Project B: This project requires $2,000 upfront, and pays you $600 at the end of each of the first 2 years, and an additional lump-sum of $1000 at the end of year 3.

Which project has a smaller IRR, and which project is more attractive?

a. Project A; Project A

b. Project A; Project B

c. Project B; Project A

d. Project B; Project B