When applied to the analysis of independent projects, NPV and IRR never provide conflicting resultsaccept or reject decisions.

Question

Quizplus · Accepted Answer

NPV and IRR are both methods used to analyze the financial feasibility of a project, but they use different approaches. NPV calculates the present value of cash inflows and outflows, while IRR calculates the discount rate that makes the net present value equal to zero. While they may differ in the specific numerical value, they will always give the same accept or reject decision for independent projects. Therefore, they never provide conflicting results.

When Applied to the Analysis of Independent Projects, NPV and IRR