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How do NPV and IRR differ when ranking mutually exclusive projects?

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Answer

For accept/reject on a single project, NPV and IRR usually agree. But for ranking mutually exclusive projects they can conflict due to differences in scale or cash-flow timing, and because IRR assumes reinvestment at the IRR while NPV assumes reinvestment at the cost of capital. When they conflict, NPV is preferred because it measures absolute value added.
Real-world example A large project has lower IRR but higher NPV than a small one; NPV guides the choice to maximize value.

Common follow-ups: Why can they conflict? | Which is preferred and why?

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All 34 Capital Budgeting questions