6. Understanding the NPV profile If an independent project with conventional, or normal, cash flows is being analyzed, the net present value (NPV) and internal rate of return (IRR) methods agree. sometimes never always Projects Y and Z are mutually exclusive pruecte cash flows and NPV profiles are shown as follows. NPV (Dollars Year Project Y Project Z 0 $1,500 -$1,500 $900 $400 $600 $300 $200 800 $200 600 Project Y $600 400 4 $1,000 Project Z 200 If the weighted average cost of capital (WACC) for each project is 10%, do the NPV and IRR methods agree or conflict? -200 O The methods conflict. O The methods agree. 2 468 10 12 14 16 18 20 COST OF CAPITAL IPercent)