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Use of IRR, NPV Payback Method in evaluating Project Cash Flows Memorandum1Use of Internal Rate of Return (IRR), Net Present Value (NPV), and Payback Method inevaluating Project Cash FlowsKathryn Gray FIN/571 AccountingApril 3, 2017Julio Jimenez
Use of IRR, NPV Payback Method in evaluating Project Cash Flows Memorandum2MEMORANDUMTO: Julio JimenezFROM: Kathryn Gray DATE: April 3, 2017SUBJECT: Project Recommendation based on the use of Internal Rate of Return, Net Present Value, and Payback Method in Evaluating Project Cash Flows The purpose of this memo is to explain the three methods used to make capital budgeting decisions and to determine whether the project or investment will be profitable. Common financial methods used to make investment decisions are the net present value (NPV), internal rate of return (IRR) and payback period (PB). All three approaches are explained below for your review and assessment, along with the project recommendation based on the resulting calculations using the three methods.