If there is a conflict between mutually exclusive projects due to the IRR, one should:
A) drop the two projects immediately.
B) spend more money on gathering information.
C) depend on the NPV as it will always provide the most value.
D) depend on the AAR because it does not suffer from these same problems.

Question

Quizplus · Accepted Answer

Depending on the Net Present Value (NPV) is the most reliable method in this scenario because NPV directly measures the increase in value brought by the projects, taking into account the time value of money, which is a more comprehensive approach than the Internal Rate of Return (IRR) in cases of mutually exclusive projects.

If There Is a Conflict Between Mutually Exclusive Projects Due