Principles of Managerial Finance
Principles of Managerial Finance
17th Edition
ISBN: 9781323419656
Author: Gitman
Publisher: PEARSON
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Chapter 10.4, Problem 10.10RQ
Summary Introduction

To discuss:

Whether the Net Present Value and IRR agree on the acceptance-rejection decisions of projects and the ranking decisions.

Introduction:

The difference between the present value of cash inflows and the present value of cash outflows over a period of time is known as the Net Present value. Internal Rate of Return is a measure used in the capital budgeting which estimates the profitability of potential investments. IRR is computed as a discount rate that makes the net present value of all cash flows from an investment as zero.

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