Describe Net Present Value (NPV) as a capital budgeting rule. Make sure to state how you would make a decision using the NPV of a project.

Explain Internal Rate of Return (IRR) as a capital budgeting rule. Make sure to state how you would make a decision using the IRR of a project.

Which capital budgeting rule (NPV or IRR) would you prefer if you are choosing between two investment projects, which require vastly different amounts of initial capital investment? Why?