finance question

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riken (Querist)
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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

KAAPIL

KAAPIL (Expert)
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01 December 2007 The conflict is between IRR and NPV.

riken

riken (Querist)
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03 December 2007 asafaf

KAAPIL

KAAPIL (Expert)
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03 December 2007 What's this?

riken

riken (Querist)
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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

KAAPIL

KAAPIL (Expert)
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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.

KAAPIL

KAAPIL (Expert)
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06 December 2007 Major conflict is between NPV and IRR and not NPV and ARR.

NPV - ARR is only in principle conflict.

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