Final answer:
NPV and IRR may disagree in cases of different project scales and unconventional cash flow timings, as they approach the calculation of investment return using different methods. NPV considers the present value of future cash flows with a specific discount rate, while IRR finds the rate at which NPV equals zero.
Step-by-step explanation:
Two important cases where the Net Present Value (NPV) and Internal Rate of Return (IRR) may disagree are: (1) when comparing projects of different scales or durations, also known as the scale problem, and (2) when projecting cash flows that include unconventional patterns, known as the timing problem. The NPV is calculated by discounting the future cash flows of a project to the present using a chosen discount rate, which may account for potential capital gains and dividends. However, this discount rate can be difficult to determine and is often subject to differing opinions among investors, which influence their perception of a stock or project's value. The IRR, on the other hand, is the discount rate that makes the NPV of all cash flows from a particular project equal to zero. While both NPV and IRR are conceptual tools for investment decision-making, they are merely guidelines that provide approximate insights into the profitability of a venture.