When the NPV and IRR rules produce conflicting investment decisions, then the:

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The NPV rule is superior because it takes into account the time value of money and provides a more accurate measure of the profitability of an investment. The IRR rule assumes a reinvestment rate that may not be realistic and can result in making the wrong investment decision. The payback period rule is also flawed because it does not consider the time value of money and ignores cash flows beyond the payback period. Therefore, the NPV rule should be the primary decision criteria.

When the NPV and IRR Rules Produce Conflicting Investment Decisions