It has sometimes been argued that net present value is "more sensitive"

than the internal rate ofreturn of an investment to variations in the cash flow estimates. For example, suppose than an immediate outlay of

$3.859 million produces proceeds of $1 million per year for 15 years and an additional end-of-life salvage value that might be from $0 to $4.4 million. With a discount rate of9 percent, the net present values would range from $4.2 million to $5.4 million (a variation of about 25 percent). The internal rate of return would range from 25 percent if there is no salvage, to 26 percent, if there is a maximum recovery of salvage (a variation ofonly 4 percent).

If sensitivity is measured by the percentage of variation in the measure of investment worth for a given range of variation in the cash flow estimates, would you agree that in general net present value is a more sensitive measure ofinvestment worth than internal rate ofreturn?