NPV V/S IRR


0

NPV V/S IRR

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.


Like it? Share with your friends!

0
BMS Team

We, at BMS.co.in, 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].

5 Comments


Warning: Undefined array key "html5" in /home/bmsnewco/public_html/wp-content/plugins/facebook-comments-plugin/class-frontend.php on line 140

Facebook comments:

This Website Is For Sale. Email us an offer we cannot refuse on [email protected] :)

X
Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube and Vimeo Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format