With independent projects,NPV and IRR provide identical accept/reject decisions.If,however,you have two mutually exclusive projects to evaluate,the most accurate thing you could say about the eventual results is that:

Question

Quizplus · Accepted Answer

When evaluating two mutually exclusive projects, NPV and IRR may give conflicting results as they consider the time value of money and the cash flows differently. NPV assumes reinvestment of cash inflows at the discount rate, while IRR assumes reinvestment of cash inflows at the IRR. Therefore, while NPV is generally preferred as a decision-making tool, it is important to consider both metrics when evaluating alternative projects.

With Independent Projects,NPV and IRR Provide Identical Accept/reject Decisions