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Question of the Week - IRR and NPV
Which of the following statements regarding Internal Rate of Return (IRR) and Net Present Value (NPV) is/are most likely correct?
1: If the NPV and IRR methods give conflicting decisions for mutually exclusive projects, the IRR method should be used to select the project.
2: A project may have positive NPV even if its IRR is less than the cost of capital
3: IRR is the discount rate at which the NPV of the project is zero.
4: A project’s IRR can be positive even if the NPV is negative.
Question of the Week - IRR and NPV 48 votes
Both statements 1 and 2 are correct
Both statements 3 and 4 are correct
Statements 2, 3 and 4 are correct