1.

Write difference between net payment method and net asset method

Answer»

Internal rate of return (IRR) is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or INVESTMENT equal zero.

Internal rate of return is used to evaluate the attractiveness of a project or investment. If the IRR of a new project exceeds a company’s required rate of return, that project is desirable. If IRR falls below the required rate of return, the project should be REJECTED.



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