The primary reason that the NPV method is conceptually superior to the IRR method for evaluating mutually exclusive investments is that multiple IRRs may exist, and when that happens, we don't know which IRR is relevant.

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The primary reason the NPV method is considered conceptually superior is that it directly measures the increase in value to the firm, taking into account the scale of the investment and the time value of money across all cash flows, whereas the IRR method can lead to incorrect decisions in cases of mutually exclusive projects due to differences in project scale and timing of cash flows, not just because of multiple IRRs.

The Primary Reason That the NPV Method Is Conceptually Superior