Use the following statements to answer this question:
I.The EANPV is effective in choosing between projects that have different life spans.
II.The IRR will lead to the same conclusion as EANPV if the two projects are not mutually exclusive and the cash flows are conventional.

Question

Quizplus · Accepted Answer

Statement I is correct as EANPV takes into account the different life spans of projects by calculating the present value of the cash flows for each project over their individual life spans. 
Statement II is also correct as long as the projects are not mutually exclusive and the cash flows are conventional, meaning that the initial cash outflow is followed by inflows throughout the life of the project. In this case, both the IRR and EANPV methods will lead to the same conclusion about which project to choose.

Use the Following Statements to Answer This Question