Question: QUESTION 7 In general, where there is a conflict between two mutually exclusive projects, the NPV of a project and its internal rate of return,
QUESTION 7 In general, where there is a conflict between two mutually exclusive projects, the NPV of a project and its internal rate of return, in terms of making a goo go decision, the conflict is resolved by which of the following rules? a. Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the higher NPV. b. Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the higher accounting net income. c. Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the higher IRR. d. Where the NPV method chooses one project but the IRR method chooses the other, the conflict should generally be resolved in favour of the project with the lower NPV
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
