For conventional projects, both NPV and IRR techniques will always generate the same accept-reject decision, but differences in their underlying assumptions can cause them to rank mutually exclusive projects differently.

Question

Quizplus · Accepted Answer

While NPV and IRR generally agree on accept-reject decisions for conventional projects, they can rank mutually exclusive projects differently due to differing assumptions about reinvestment rates and cash flow timing.

For Conventional Projects, Both NPV and IRR Techniques Will Always