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Asked Jan 30, 2020
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Why do most academics and financial executives regard the NPV as being the single best criterion and better than the IRR? Why do companies still calculate IRRs?

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Expert Answer

Reason of NPV being a single best criterion for capital budgeting decisions:
  • NPV is better than IRR and is a single best criterion for capital budgeting decisions because this is the only method that considers shareholders’ wealth and a unique solution for each and every project.

Reason for co...

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