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How Do NPV and IRR Differ

Question 13

Multiple Choice

How do NPV and IRR differ?


A) NPV measures profitability in absolute terms, whereas the IRR method measures profitability in relative terms.
B) IRR should be used for choosing among competing, mutually exclusive projects.
C) NPV considers the time value of money and IRR does not.
D) Both NPV and IRR will generate the same decisions.

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