Which of the following statements about comparing the techniques of the net present value and internal rate of return are correct? 1. The internal rate of return is stated as a percent and is therefore east to communication to decision makers who may not understand the fine points of finance. 2 The net present value assumes that all cash flows are reinvested at the cost of capital and is therefore realistic.

Only statement 1 is correct

Only statement 2 is correct

Neither statement is correct

Both statements are correct.