The net present value (NPV) method differs from the internal rate of return (IRR) method in that: both methods always yield similar conclusions for mutually exclusive projects the IRR method finds the rate of return that gives a project a zero NPV whereas the NPV method discounts the cash flows by the required rate of return the IRR method provides better conclusions for mutually exclusive projects the NPV method discounts cash flows using the risk-free rate of return and the IRR method does not