Selecting investment projects according to rules based either on project NPV or IRR results in maximizing firm value.
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NPV method is the superior method
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False.
The net present value (NPV) of a project is the present value of cash inflows discounted at the required rate of return minus the initial investment of the project. A firm accepts the project if NPV is positive. IRR is the rate of return at which the net present value is zero (NPV = 0). A firm accepts the project if its IRR is greater than the required rate of return.
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