How Do NPV and IRR Differ

question 13

Multiple Choice

How do NPV and IRR differ?

• A) NPV measures profitability in absolute terms, whereas the IRR method measures profitability in relative terms.
• B) IRR should be used for 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:

Prefrontal Lobotomy

A surgical procedure once used to treat mental illness, involving the removal or severing of connections in the brain's prefrontal cortex.

Electroconvulsive Therapy

A medical treatment involving electric currents passed through the brain to treat some mental health conditions.

Drug Treatment

The use of prescription drugs, therapies, or procedures to treat illness or addiction, often under medical supervision.

Opiate Addiction

A chronic disorder characterized by the compulsive use of opiate drugs, such as heroin or prescription painkillers, resulting in physical, psychological, and social harm.