1 how are net present value npv and internal rate of return, Ask an Expert

Finance

1. How are Net Present Value (NPV) and Internal Rate of Return (IRR) related? Which is the better decision rule to follow for project selection or rejection? Why?

2. There have been two 'modifications' in discounted cash flow metrics. First, the Internal Rate of Return (IRR) has been revised giving a Modified Internal Rate of Return (MIRR). Second, the Profitability Index (PI) has been revised giving a Modified Profitability Index (MPI). Why were the IRR and the PI revised? When are these measures appropriate to use?

3. Some people take a position that the Return on Investment (RoI) is the appropriate measure or decision rule to use. Do you agree? Why or why not? How would the project's RoI be calculated?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91728961

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