Question: For mutually exclusive projects, explain why picking one project over another because it has a larger IRR can lead to mistakes. Explain why ranking projects

  • For mutually exclusive projects, explain why picking one project over another because it has a larger IRR can lead to mistakes.
  • Explain why ranking projects according to their NPV might not be optimal when you evaluate projects with different resource requirements.
  • How can the profitability index be used to identify attractive projects when there are resource constraints?

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