NPV and IRR’s Comparative Analysis in Enterprises Investment Decision Making

DOI

10.2991/978-94-6463-054-1_18How to use a DOI?

Keywords

Investment; Net present value; Internal rate of return

Abstract

In the economic evaluation of engineering projects, the net present value and internal rate of return (IRR) are generally used to measure the economic benefits of the project. However, the analysis of the two indices is sometimes self-contradictory. This article points out that the net present value method is more scientific and reasonable than the internal rate of return through specific case analysis of the causes of this problem. Especially in the feasibility analysis of mutually exclusive scheme under certain circumstances, when the net present value index and the internal rate of return index conclusion contradict, it is better to choose the net present value method as the preferred decision method.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Xuanrun Liu
PY  - 2022
DA  - 2022/12/14
TI  - NPV and IRR’s Comparative Analysis in Enterprises Investment Decision Making
BT  - Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022)
PB  - Atlantis Press
SP  - 157
EP  - 165
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-054-1_18
DO  - 10.2991/978-94-6463-054-1_18
ID  - Liu2022
ER  -