When conflicting signals are received from using NPV and IRR, NPV always produces the correct signal to invest.

Name: When conflicting signals are received from using NPV and IRR, NPV always produces the correct signal to invest.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

NPV takes into consideration the time value of money and provides a more reliable signal than IRR which assumes reinvestment at the same rate. Therefore, if there is a conflict between NPV and IRR, NPV should be relied upon to make investment decisions.

When Conflicting Signals Are Received from Using NPV and IRR