When net present value and internal rate of return analysis provide inconsistent rankings of projects, the financial manager should generally move forward with the project that has the highest internal rate of return. a) trueb) false

Answer: false

Explanation:

When mutually exclusive projects rank differently, the project with the highest Net Present Value should be chosen.

The net present value and the internal rate of return are used to measure the profitability of a project. They are usually used in the capital budgeting process.

The net present value substracts the discounted cash flow from the outlay of cash.

The internal rate of return is the discount rate that equates the after tax cash flow from a project to its initial cash outlay.