NPV Vs Irr and NPV Vs Pi
NPV Vs Irr and NPV Vs Pi
NPV Vs Irr and NPV Vs Pi
IRR
Conventional Independent Projects:
In case of conventional investments, which are
economically independent of each other, NPV and
IRR methods result in same accept-or-reject
decision if the firm is not constrained for funds in
accepting all profitable projects.
Cont
Incremental approach
It
The
Scale of investment
REINVESTMENT ASSUMPTION
The
NPV VERSUS PI
A conflict may arise between the two
methods if a choice between mutually
exclusive projects has to be made. NPV
method should be followed.