Conflicts between two mutually exclusive projects occasionally occur,where the NPV method ranks one project higher but the IRR method puts the other one first.In theory,such conflicts should be resolved in favor of the project with the higher NPV.

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The NPV method is considered to be a more reliable method of investment appraisal than the IRR method. This is because the NPV method takes into account the time value of money and the cash flows of a project over its entire life. Therefore, conflicts between two mutually exclusive projects should be resolved in favor of the project with the higher NPV as it provides a more accurate picture of the profitability of the project.

Conflicts Between Two Mutually Exclusive Projects Occasionally Occur,where the NPV