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16) Which of the following best describes the reason for choosing the NPV rule over the IRR rule when dealing with mutually exclusive projects? A.

16) Which of the following best describes the reason for choosing the NPV rule over the IRR rule when dealing with mutually exclusive projects?

A. NPV rankings are affected by external interest rates or discount rates. B. The reinvestment rates used by NPV are more conservative and therefore are economically more relevant. C. IRR ranking assumes reinvestment at opportunity cost of capital that is less realistic and economically less relevant.

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