The net present value method is a more conservative technique for selecting investment projects than the internal rate of return method because the NPV method

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The NPV method assumes that cash flows are reinvested at the firm's weighted average cost of capital. This is a more conservative approach compared to the IRR method, which assumes that cash flows are reinvested at the project's IRR. By using the firm's cost of capital as the discount rate, the NPV method takes into account the opportunity cost of capital and provides a more realistic measure of the project's profitability. This makes it a more suitable technique for ranking and selecting investment projects.

The Net Present Value Method Is a More Conservative Technique