Investment project evaluation – NPV and IRR criteria

This paper is a about two rules used in capital investment decision-making. NVP and IRR incorporate the time value of money using a discount factor based in the firm’s relevant interest rate or cost of capital. Decision-makers clearly prefer IRR to NPV although NPV technique offers more practical advice for managers them IRR

Keywords

net present value (NPV), internal rate of return, investment, capital, decision-making

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