The NPV Method Is the Preferred Method Over IRR for Selecting

Multiple Choice

The NPV method is the preferred method over IRR for selecting projects because ________.

A) its result is expressed in dollars and management can make an assessment as to its financial impact on the value of the business
B) it accounts for the time value of money better than IRR
C) it assumes that cash flows are reinvested at the internal rate of return for each and every year of the useful life
D) it gives a project ranking consistent with that of IRR