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    Present Value Versus IRR

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    How does the concept of present value analysis affect the firm's investment program? How does Internal Rate of Return and Modified Internal Rate of Return enter into the capital investment program? Which method is preferred over the other methods?

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    I would recommend either the net present value (NPV) or the internal rate of return (IRR) in determining investment projects in my company. Without knowing the details of the investment, it is not possible for me to decipher between the two.

    Although the banks would like to see ...

    Solution Summary

    This solution explains NPV and IRR and its differences and similarities.