A Study on the Cause of the Conflict bwtween NPV and IRR
Yang Chong
Abstract
Yang Chong
Abstract
NPV and IRR are two criteria for investment opportunity. But it seems that there exist conflict between them, and furthmore, one has to face the multi root problem of the IRR equation. In this article the author argues that, NPV and IRR are complementary but not alternative criteria thus the seeming conflicts can actially be tackled, and multi root problem of the IRR equation can be solved if monetary market is efficient.
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NPV and IRR are two criteria for investment opportunity. But it seems that there exist conflict between them, and furthmore, one has to face the multi root problem of the IRR equation. In this article the author argues that, NPV and IRR are complementary but not alternative criteria thus the seeming conflicts can actially be tackled, and multi root problem of the IRR equation can be solved if monetary market is efficient.
Key concepts: Investment (military), Root (linguistics), Economics, Actuarial science, Econometrics, Political science, Philosophy, Law