Conflicts between two mutually exclusive projects occasionally occur, where the NPV method ranks one project higher but the IRR method ranks the other one first. In theory, such conflicts should be resolved in favor of the project with the higher positive NPV$.$

$($Choose the option which best represents the statement$)$

Question $2$ options:

Conflict resolution depends on the project's payback period.

The higher$-$ranked project is always the riskier option.

NPV considers the project's timing and cash flows.

IRR provides a better measure of project profitability.