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 mutually exclusive projects, NPV and IRR may give conflicting results since they use different assumptions about the reinvestment of cash flows. Specifically, IRR assumes that positive cash flows are reinvested at the same rate as the project's internal rate of return, whereas NPV assumes that they are reinvested at the company's cost of capital. As a result, the rankings generated by NPV and IRR may differ, leading to potentially different accept/reject decisions. Therefore, the most accurate statement is that NPV and IRR may give conflicting results.

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