The following are the various dissimilarities between NPV and IRR –

  • Size disparity problem

NPV and IRR method give different ranking to projects when the initial investment in projects under consideration i.e., mutually exclusive projects is different .The cash outlay of some projects is larger than that of others.

  • Timing of cash flows

The most commonly found condition for the conflict between the NPV and IRR methods is the difference in the timing of cash flow


  • Projects with unequal lives

Another situation in which the IRR and NPV methods would give a conflict ranking to mutually exclusive projects is when the projects have different expected lives.

The following two tabs change content below.
We, at, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]

Leave a reply is aimed at revolutionising Bachelors in Management Studies education, also known as BMS for students appearing for BMS exams across all states of India. We provide free study material, 100s of tutorials with worked examples, past papers, tips, tricks for BMS exams, we are creating a digital learning library.

Disclaimer: We are not affiliated with any university or government body in anyway.

©2020 BMS - Bachelor of Management Studies Community 

A Management Paradise Venture

Ask Us On WhatsApp

Log in with your credentials


Forgot your details?


Create Account