The net present value method of project evaluation is preferred to the internal rate of return method because:

a) Most projects are independent rather than mutually exclusive.

b) The internal rate of return method may give multiple rates of return or zero

rates of return in some cases, but not for mutually exclusive projects.

c) The internal rate of return method may give an inconsistent ranking due to the

magnitude or timing of cash flows.

d) The internal rate of return method yields net present value profiles that do not

intersect for mutually exclusive projects.