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Suppose you are a financial manager and you have the following information on two projects:                                   Project Alpha    Project Beta NPV                            $34,670             $1,500 IRR (required rate of return is 10%) 12

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Suppose you are a financial manager and you have the following information on two projects:

                                  Project Alpha    Project Beta

NPV                            $34,670             $1,500

IRR (required rate of return is 10%) 12.4%            10.6%

Payback Period                    6 years            2 years

• If the projects are mutually exclusive, is there a clear best option to which project should be undertaken? Why or why not? 
• Which option is the financial manager likely to choose? Why?
• Under what circumstances would the other project be undertaken?