Why is NPV a better measure than IRR? And how are the two related anyway?© BrainMass Inc. brainmass.com June 3, 2020, 11:37 pm ad1c9bdddf
Net present value (NPV) is calculated based on the expected returns and the expected costs of an investment, where these expected returns and expenses are discounted by a rate that reflects inflation and opportunity costs. The process NPV / IRR analysis enables you to determine the net present value of a process. As parameters for ...
The solution is detailed and explains the concepts very well. The solution is very easy to understand as well. Overall, an excellent response to the question being asked. It clearly illustrates why NPV is better than IRR.