Question 1
The first and most difficult step in project analysis is calculating the evaluation measures, such as net present value (NPV), internal rate of return (IRR), and profitability index (PI).
◦ true
◦ false
Question 2
The IRR method’s assumption that cash inflows are reinvested at the cost of capital is more reasonable than the NPV’s assumption that cash flows are reinvested at the IRR. This is an important reason that the IRR method is generally preferred over the NPV method.
◦ true
◦ false