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Under what circumstances will the IRR and NPV rules lead to the same decision (accept/reject)? When...

Under what circumstances will the IRR and NPV rules lead to the same decision (accept/reject)? When might they conflict?

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Q.Under what circumstances will the IRR and NPV rules lead to the same decision and when they might conflict

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  • NPV and IRR lead to the same decision when Projects cash flow which is the intial investment for project is negative regardless of of all the rest is positive it is usually same
  • Also with the independent project which does not affect the decision of accept or reject other projects will lead to the same decision.
  • In a scenarion wherein NPV is positive that time only investment is accepted however projet is rejected if NPV is negative.
  • If the project independent and IRR>RR, and NPV>0 accept on or both. If mutually exclusive, IRR1>IRR2, and NPV>NPV2 accept project one from others.
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