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Briefly describe the following three key valuation methodologies that companies use-- NPV, IRR, and MIRR. Please site any sources and provide references.
NPV refers to the Net present value and it provides the value addition done by the project. NPV can be calculated by following formula: Present value of future cash flows- Initial Investment. Internal Rate of Return (IRR) is that "rate of return at which the NPV from the above investments will become zero. It is ...
This solution discusses valuations methodologies that companies used. Those discussed include net present value (NPV), internal rate of return (IRR) and modified internal rate of return (MIRR). The explanation is provided in 299 words with two references.