Net Present Value : Net present value refers the variance between a present value of cash flows and the present value of cash outflows . NPV decision rule: decision rule signifies the decision related to investment in the project. The value of is greater than 0 then the project should be considered for the acceptance, otherwise, the project is rejected. Internal Rate of return : Internal rate of return is that rate at which the net present value became zero. IRR Rule: rule signifies that project should be considered for acceptance if the is greater than the cost of capital else the project is rejected. To Explain: The conditions in which the rule and rule lead to the same decision.

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Chapter 8, Problem 6CC

Summary Introduction

Net Present Value: Net present value refers the variance between a present value of cash flows and the present value of cash outflows.

NPV decision rule: decision rule signifies the decision related to investment in the project.

The value of is greater than 0 then the project should be considered for the acceptance, otherwise, the project is rejected.

Internal Rate of return: Internal rate of return is that rate at which the net present value became zero.

IRR Rule: rule signifies that project should be considered for acceptance if the is greater than the cost of capital else the project is rejected.

To Explain: The conditions in which the rule and rule lead to the same decision.

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