A project manager is using the internal rate of return method to make the final decision on which project to undertake. Which of these four projects has the highest internal rate of return?
A. $25,000 initial outlay with $10,000 cash inflows during the following five years
B. $12,500 initial outlay with $10,000 cash inflows during the following five years
C. $25,000 initial outlay with $5,000 cash inflows during the following five years
D. $12,500 initial outlay with $5,000 cash inflows during the following five years
Answer:B
A project manager is using the internal rate of return method to make the final decision on which project to undertake. Which of these four projects has the highest internal rate of return?
A. $25,000 initial outlay with $10,000 cash inflows during the following five years B. $12,500 initial outlay with $10,000 cash inflows during the following five years C. $25,000 initial outlay with $5,000 cash inflows during the following five years D. $12,500 initial outlay with $5,000 cash inflows during the following five years