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Sept/Dec 2018 Qn 31

This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.

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July 17, 2020 at 11:57 am #577078
wilder
Participant
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Hi
In Sept/Dec 2018 exam question 31, the examiner asked the superiority of NPV over IRR. One of the points he made was NPV is superior when considering mutual exclusive projects than IRR because of its re-investment assumption.
My question, what if I say that NPV is superior than IRR because its an absolute measure and not a relative measure when considering mutual exclusive projects, will it still be correct ?
July 17, 2020 at 4:50 pm #577186
John Moffat
Keymaster
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Yes, it would be correct and would get the marks 🙂
July 17, 2020 at 4:52 pm #577187
wilder
Participant
- Topics: 30
- Replies: 21
Thank you
July 17, 2020 at 5:07 pm #577191
John Moffat
Keymaster
- Topics: 57
- Replies: 54628
You are very welcome 🙂
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