FREE Trial

Research indicates that the IRR method is a more popular method of investment appraisal than the NPV

Question:

Research indicates that the IRR method is a more popular method of investment appraisal than the NPV method. Why might this be?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 57% (14 reviews)

The IRR method does appear to be preferred to the NPV method among practici...View the full answer


answer-question-section
Answered By
tutor-profile-image
Qurat Ul Ain
Successful writing is about matching great style with top content. As an experienced freelance writer specialising in article writing and ghostwriting, I can provide you with that perfect combination, adapted to suit your needs. I have written articles on subjects including history, management, and finance. Much of my work is ghost-writing, so I am used to adapting to someone else's preferred style and tone. I have post-graduate qualifications in history, teaching, and social science, as well as a management diploma, and so am well equipped to research and write in these areas.
4.80+ 265+ Reviews 421+ Question Solved
Related Book For  book-img-for-question
Financial Management for Decision Makers

Financial Management for Decision Makers

ISBN: 978-0138011604

2nd Canadian edition

Authors: Peter Atrill, Paul Hurley

See More Books
Question Posted:
See More Questions

Related Video

NPV stands for \"Net Present Value,\" which is a financial concept used to determine the value of an investment or project. It measures the difference between the present value of cash inflows and the present value of cash outflows over a given period of time, using a specific discount rate. To calculate the NPV of an investment, you need to first estimate the cash inflows and outflows associated with the investment, and then discount them back to their present values using a discount rate. The discount rate represents the cost of capital or the expected rate of return required by investors. The formula for calculating NPV is: NPV = sum of (cash inflows / (1 + discount rate)^t) - sum of (cash outflows / (1 + discount rate)^t) Where: Cash inflows: the expected cash received from the investment Cash outflows: the expected cash paid out for the investment Discount rate: the required rate of return or the cost of capital t: the time period in which the cash flow occurs If the NPV is positive, it means that the investment is expected to generate a return higher than the required rate of return or the cost of capital, and it may be considered a good investment. If the NPV is negative, it means that the investment is not expected to generate a return higher than the required rate of return or the cost of capital, and it may be considered a bad investment.

Students also viewed these Finance questions

For Grandmas Who Do Windows 1st Edition - ISBN: 0887483461 - Free Book