Which of the following cause conflicting ranking of an investment opportunity under NPV and IRR…
For mutually exclusive projects, Net Present Value (NPV) and Internal Rate of Return (IRR) can produce conflicting project rankings due to three structural differences: (a)…
Choose your answer
Which of the following cause conflicting ranking of an investment opportunity under NPV and IRR criteria?
a. Cash flow disparity
b. Investment size dispute
C. Investment life disparity
d. Product life cycle disparity Choose the most appropriate answer from the option given below:
Answer and explanation
Correct answer A
For mutually exclusive projects, Net Present Value (NPV) and Internal Rate of Return (IRR) can produce conflicting project rankings due to three structural differences: (a) cash flow timing disparity, (b) initial investment size (scale) disparity, and (c) project economic life disparity.
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UGC NET Management