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conflicts between two mutually exclusive projects occasionally occur, where the npv method ranks one project higher but the irr method puts the other one first. in theory, such conflicts should be resolved in favor of the project with the higher npv. t or f

Respuesta :

Theoretically, these disputes ought to be settled in favor of the project with the larger NPV. The given statement is True. 

Define an NPV.

A set of cash flows is said to have a net present value or net present worth if they occur at diverse times. The present value of a cash flow depends on how long it will be before it occurs. Another element is the discount rate. The temporal value of money is considered by NPV.

Using the internal rate of return is one method of calculating the rate of return on an investment. The formula is "internal" because it does not account for external factors like the risk-free rate, inflation, the cost of capital, or financial risk. Applications of the method can be either ex-post or ex-ante.

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