finance question
This query is : Resolved
01 December 2007
there is any conflict between average rate of return(ARR) and net present value (NPV)plz reply fast reply with any example
06 December 2007
there is any conflict between average rate of return(ARR) and net present value (NPV)plz reply fast reply with any example
06 December 2007
NPV is PV of Inflows - PV of Outflows
ARR is dealing with average profit after tax and is divided by average investment.
In case scrap value is zero then take zero as same and then take average. Thus it works on the average principle.
NPV works on the principle of present value.
The conflict is on terms of average and present value principle.
ARR is dealing with average profit after tax and is divided by average investment.
In case scrap value is zero then take zero as same and then take average. Thus it works on the average principle.
NPV works on the principle of present value.
The conflict is on terms of average and present value principle.
06 December 2007
Major conflict is between NPV and IRR and not NPV and ARR.
NPV - ARR is only in principle conflict.
NPV - ARR is only in principle conflict.
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