This question basically asks you to compare the Net Present Value (NPV) to the Internal Rate of return (IRR) on the time length of an investment project.. a. Draw a "growth curve" for a investment project on a log PV -t space and interpret it's meaning. b. On your graph show the optimal investment time under the NPV criterion c. Show the same for the IRR criterion d. In general when do you prefer IRR over NPV ?
This question basically asks you to compare the Net Present Value (NPV) to the Internal Rate of return (IRR) on the time length of an investment project.. a. Draw a "growth curve" for a investment project on a log PV -t space and interpret it's meaning. b. On your graph show the optimal investment time under the NPV criterion c. Show the same for the IRR criterion d. In general when do you prefer IRR over NPV ?
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.8P
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Transcribed Image Text:This question basically asks you to compare the Net Present Value (NPV) to the Internal Rate of return
(IRR) on the time length of an investment project..
a. Draw a "growth curve" for a investment project on a log PV -t space and interpret it's meaning.
b. On your graph show the optimal investment time under the NPV criterion
c. Show the same for the IRR criterion
d. In general when do you prefer IRR over NPV ?
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