Assertion (A): When two or more investment proposals are mutually exclusive, ranking the proposals on the basis of IRR, NPV, and PI methods may give contradictory results.
Reason (R): The contradictory results in the ranking are due to differing dimensions relating to the scale of investments, cash flow patterns, and project lives.
Indicate the correct answer.
A. Both (A) and (R) are true
B. (A) is true, (R) is a necessary condition, but not a sufficient condition
C. Both (A) and (R) are false
D. Both (A) and (R) are true, and (R) explains the reason sufficiently
Answer: Option B
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