is 15%. Other details of these projects are
mentioned below:
Project Cash Flow Cash Flow Cash Flow Net Internal
(in Year 0) (in Year 1) (in Year 2) Present Rate of
In INR In INR In INR Value Return
(NPV) (IRR)
In INR
X -30,000 +22,500 +23,000 6,957 33%
Y -39,500 +27,000 +32,400 8,477 31%
Which of the 2 projects should the firm select?
Justify your answer with the help of Incremental
NPV and Incremental IRR.
(7)