Select Any One Of the Following Options: While ranking mutually exclusive projects with different life and size, NPV and IRR will always give conflicting rankings.FalseTrue

If projects are mutually exclusive, then the NPV and the IRR may disagree on which project adds value to the shareholder's wealth.Select one:TrueFalse

Which of the following statements is FALSE?Group of answer choicesProblems can arise using the IRR method when the mutually exclusive investments have differences in scale.Picking one project over another simply because it has a larger IRR can lead to mistakes.The profitability index measures the value created in terms of PV(Cash Flow) per unit of resource consumed.The profitability index alone can be easily adapted for determining the correct investment decisions when multiple resource constraints exist.

Select Any One Of the Following Options: If NPV of the project is negative means project must be making losses.FalseTrue

Of the two techniques of project evaluation IRR and NPV,  which one will you choose and why? 40 Responses

Multiple Select QuestionSelect all that applyThe decision rule for NPV includes: (Check all that apply).Multiple select question.if an asset's future net cash flows yield a negative net present value, invest.when comparing projects with similar initial investments and risk, select the one with the lowest net present value.if an asset's future net cash flows yield a positive net present value, invest.when comparing projects with similar initial investments and risk, select the one with the highest net present value.