# Search for information that compares the use of the internal rate of return and net present value method for the financial evaluation of projects. Write a short summary of the strengths and weaknesses of each method. Discuss the use of either method to rank a set of competing projects.

### Principles of Information Systems ...

12th Edition
Ralph Stair + 1 other
Publisher: Cengage Learning
ISBN: 9781285867168

Chapter
Section

### Principles of Information Systems ...

12th Edition
Ralph Stair + 1 other
Publisher: Cengage Learning
ISBN: 9781285867168
Chapter 2, Problem 2WE
Textbook Problem
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## Search for information that compares the use of the internal rate of return and net present value method for the financial evaluation of projects. Write a short summary of the strengths and weaknesses of each method. Discuss the use of either method to rank a set of competing projects.

### Explanation of Solution

Net Present Value (NPV):

NPV is used in determining cash inflows and outflows of business finance. It is the sum of the present value of the net cash flow of each time period. The project is said to be financially attractive with the high NPV...

### Explanation of Solution

Strengths and weaknesses of NPV and IRR:

 Strength Weakness NPV It always directs to single correct or wrong solution. It is used in making the conflicting decisions. It includes the expected values which may not provide true solutions It doesn’t consider the size of the project...

### Explanation of Solution

Justification:

Net profit value includes higher rank than Rate of return because NPV includ...

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