The NPV and IRR methods,when used to evaluate an independent project,will lead to different accept/reject decisions unless the IRR is greater than the required rate of return.

Question

Quizplus · Accepted Answer

The NPV and IRR methods, when used to evaluate an independent project, will always lead to the same accept/reject decision regardless of the size or timing of cash flows. Therefore, the statement is false. However, if the IRR is greater than the required rate of return, it would still be a favorable investment according to both methods.

The NPV and IRR Methods,when Used to Evaluate an Independent