For independent projects,net present value analysis and internal rate of return analysis yield completely different decisions.

Question

Quizplus · Accepted Answer

Both Net Present Value (NPV) and Internal Rate of Return (IRR) methods are used to evaluate the profitability of investments, and for independent projects, if the projects are profitable (NPV > 0, IRR > cost of capital), both methods will generally indicate the same decision to accept the project.

For Independent Projects,net Present Value Analysis and Internal Rate of Return