**Projects are said to be ***independent* if the accept/reject
decision does not have any impact on the accept/reject decision of other projects. Projects
are said to be *mutually exclusive* if the acceptance of one project has any consequence
upon the decision of another project. The latter case is the most often seen as firms decide among several comparable options
but is only going to select one of the options.

** **

**The NPV and IRR methods make the same accept/reject decisions for independent projects, but if
projects are mutually exclusive, then ranking conflicts can arise. If conflicts arise, the NPV method should be used due to
the more conservative or realistic reinvestment rate assumption. The NPV and IRR methods are both superior to the payback,
but NPV is superior to IRR. **

**Instead of calculating the MIRR, calculate both the NPV and IRR for each project. Practice setting the problems up using the formula and then using your calculator
to find the NPV and IRR. The NPV**_{X}=$58.02 and IRR_{X}=14.11%. The NPV_{Y}=$39.94 and IRR_{Y}=15.62%.
Project X has a higher NPV but Project Y has a higher expected rate of return.
The conflict is a result of the reinvestment rate assumption. Select Project
X because it adds more value to the company.