#npva

Net Present Value And Internal Rate Of Return – Advantages And Disadvantages Of NPV and IRR

Now that you’re familiar with both NPV and IRR and understand the shortcomings of PB period and ARR, let’s compare the advantages and disadvantages of NPV and IRR. Advantages: The NPV method is a direct measure of the dollar contribution to the stockholders. The IRR method shows the return on the original money invested. Disadvantages: The NPV method does not measure the project size. The IRR…