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If projects are mutually exclusive, only one project can be chosen. The internal rate of return (IRR) and the net present value (NPV) methods will
If projects are mutually exclusive, only one project can be chosen. The internal rate of return (IRR) and the net present value (NPV) methods will not always choose the same project. If the crossover rate on the NPV profile is below the horizontal axis, the methods will _____agree. Projects W and X are mutually exclusive projects. Their cash flows and NPV profiles are shown as follows. If the required rate of return for each project is 2%, do the NPV and IRR methods agree or conflict? The methods conflict. The methods agree. A key to resolving this conflict is the assumed reinvestment rate. The NPV calculation implicitly assumes that intermediate cash flows are reinvested at the ____, and the IRR calculation assumes that the rate at which cash flows can be reinvested is the _____
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