The net present value method of project evaluation is


The net present value method of project evaluation is preferred to the internal rate of return method because: a) the internal rate of return method may give multiple rates of return or zero rates of return in some cases, but not for mutually exclusive projects. b) the internal rate of return method may give an inconsistent ranking due to the magnitude or timing of cash flows. c) most projects are independent rather than mutually exclusive. d) the internal rate of return method yields net present value profiles that do not intersect for mutually exclusive projects.

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Financial Management: The net present value method of project evaluation is
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