The Net Present Value method of project evaluation is preferred over the Internal Rate of Return method because the Net Present Value method:




a-Considers the time value money where IRR does not.


b-Considers the risk of the project where the Internal Rate of Return does not.


c-Includes all the cash flows in its decision where IRR does not.


d-Considers the timing of the cash flows where the Internal Rate of Return does not.


e-Assumes a more realistic reinvestment rate assumption than IRR.