The NPV method is the preferred method over IRR for selecting projects because ________.
A) its use leads to shareholder value maximization
B) it accounts for the time value of money
C) it assumes that cash flows are reinvested at the internal rate of return
D) it gives a project ranking consistent with that of IRR

Question

Quizplus · Accepted Answer

The NPV method is preferred because it directly measures the increase in value to the firm and aligns with the goal of maximizing shareholder wealth.

The NPV Method Is the Preferred Method Over IRR for Selecting