Why do NPV profiles cross and thus cause sometimes inconclusive results based on IRR and NPV in capital budgeting? If one project costs more than the other, then a company has more to reinvest in earlier years NPV methods assume the cash flows are reinvested at the WACC, while IRR method assumes that cash flows are reinvested at IRR Latter cash flows are more sensitive to a higher discount rate (WACC) than earlier cash flows Low discount rates (WACC) make projects with higher cash flows in the future look better All of the above are reasons why one might obtain inconclusive results using IRR and NPV in capital budgeting