In discussing NPV and IRR rankings for two projects being compared, an analyst has made...
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Finance
In discussing NPV and IRR rankings for two projects being compared, an analyst has made the following statements:
- IRR and NPV will always rank two projects differently if they vary in size.
- IRR and NPV may rank two projects with unconventional cash flows differently because IRR assumes that cash flows can be reinvested at the IRR rate.
The analyst is most likely correct in stating:
Statement (i) only.
Statement (ii) only.
Neither statement (i) nor (ii).
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