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Question of the Week - IRR and NPV

exam_whizexam_whiz IllinoisPosts: 68 Sr Associate
edited July 2014 in Level 1 Questions
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
8%
ZeecrimsonmoosejmkwinsNavrajsandhu90 4 votes
Both statements 3 and 4 are correct
62%
MM12RaviVoodaGeorgeKopEffEssRoyDrsparksnvtraderTannorGoggspriyaamin318Paulcfa1chmpnarcherjwdeckersurangasaRandallK27jak5189krishTaTeemosimply_complex2ghateley 30 votes
Statements 2, 3 and 4 are correct
29%
MrBlueHmelendezjmsatchwellsagardunwaniJENUWINEdsilva22craigydamgbattThomasWthendry7rachelmabrahmb2MargotImGoingAllTheWay 14 votes

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