Unformatted text preview: (i). Computation of IRR is a tough call whereas NPV s very easy to compute. Thus for quick result NPV may be preferred. (ii). The IRR approach creates a peculiar situation if we compare two projects with different inflow/outflow patterns. Whereas NPV always gives a correct answer. (iii). IRR assumes that all the cash flows which is received during the period of the project will again be invested at the same rate which is not always true. Whereas in NPV if the rate changes it can be discounted at different rates....
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This note was uploaded on 10/03/2011 for the course ACCOUNTING 103 taught by Professor Ngo during the Spring '11 term at Berkeley.
- Spring '11