Friday 16 September 2011

Advantages of IRR

IRR

IRR stands for Internal Rate of Return and this is a stage whether NPV become Zero. The internal rate of return is compared with the cost of capital and if the irr is greater than cost of capital then project may be accepted.

Advantages of IRR
  • Based on Cash flow
  • Relatively easier to calculate than NPV
  • Mutually exclusive project can not be explained

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