What Is the Difference Between NPV and IRR

question 77

Multiple Choice

What is the difference between NPV and IRR?

• A)NPV measures profitability in absolute terms, whereas the IRR method measures profitability in relative terms.
• B)NPV is used on one project only and IRR is used when choosing among competing, mutually exclusive projects.
• C)NPV considers the time value of money, and IRR does not.
• D)Both NPV and IRR will generate the same decisions.

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Definitions:

Proactive Interference

The phenomenon where older memories interfere with the recall of newer memories.

Racquetball

A fast-paced sport played with a small rubber ball and a racquet in an indoor court by two or four players.

Semantic Memory

A type of long-term memory that involves the capacity to recall words, concepts, or numbers, which is essential for the understanding and use of language.

General Knowledge

encompasses a broad range of information across various subjects and disciplines that an individual accumulates throughout life.