what is the difference between npv and irr method of capital
budgeting and which one is better?
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Answer Posted / mahesh kumar bagarti
NPV stands for net present value where as I.R.R stands for
internal rate of return.N.P.V is the difference between
present value of cash inflow and present value of cash outflow
or initial investment.I.R.R is the rate that equates present
value of cash inflow with cash outflow.N.P.V is better
because it takes into consideration the time value of money.
| Is This Answer Correct ? | 56 Yes | 24 No |
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