The net present value and internal rate of return approaches normally yield the same accept/reject decisions for a particular project. However, conflicts may arise when dealing with mutually exclusive projects. The reinvestment rate assumption embodied in the net present value approach—namely, that cash flows from a project are reinvested at the cost of capital—generally is more realistic than that underlying the internal rate of return method. For this reason, the net present value method is preferred to the internal rate of return method. GT=75