Project X has an IRR of 12%, and Project Y has an IRR of 10%. Which project should be chosen as a better investment for the organization?

The correct answer is C. Project X. Internal Rate of Return (IRR) measures the profitability of an investment. All else being equal, a higher IRR indicates a better return, so Project X (12%) is the better investment over Project Y (10%). While payback period and NPV are also useful metrics, the question asks to…

Submitted by andreas_gr· Apr 18, 2026Value-driven Delivery

Question

Options

AIt depends on the payback period
BProject Y
CProject X
DProject or Y, depending on the NPV

How the community answered

(61 responses)

A
3% (2)
B
5% (3)
C
84% (51)
D
8% (5)

Explanation

Internal Rate of Return (IRR) measures the profitability of an investment. All else being equal, a higher IRR indicates a better return, so Project X (12%) is the better investment over Project Y (10%). While payback period and NPV are also useful metrics, the question asks to compare based on IRR alone.

Topics

#Internal Rate of Return (IRR)#Project Selection#Financial Metrics#Investment Decision

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