NPV and IRR methods, when used to evaluate two independent and equally risky projects, will lead to different accept/reject decisions and thus capital budgets if the projects' IRRs are greater than their cost of capital.

Question

Quizplus · Accepted Answer

The NPV and IRR methods will lead to the same accept/reject decisions for independent projects if the IRRs are greater than the cost of capital, as both methods would indicate that the projects are profitable.

NPV and IRR Methods, When Used to Evaluate Two Independent