When evaluating a project, the most reliable decision making rules are the NPV and IRR. However, we have learned that NPV rule is more reliable than the IRR because of a few special cases in which the IRR rule gives an incorrect answer. What are those special cases?

The firm is evaluating several mutually exclusive projects

When the NPV of a project is equal to $0$

The project has non$-$normal cash flows

When the project involves aliens

Select one:

a$.1,2,$ and $3$

b$.2$ and $4$ only.

c$.$ all of the above.

d$.1$ and $2$ only.

e$.1$ and $3$ only.