my question is why is NPV method preffered over IRR method?..
Module says projects with heavy cash flows will be favoured by the IRR method..(HOW COME?)
please explain me with example....thanks in advance.
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Npv vs. irr
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NPV is better than IRR because:
a. NPV shows expected increase in shareholders wealth
b. NPV gives clear-cut accept/reject decision, while IRR gives multiple results.
c. NPV gives better ranking when compared to IRR.
d. NPV calculation is easier, while IRR takes long time to calculate.
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