NPV vs IRR

IRR係回報率,一般只要高過要求回報率,這項目都可做,NPV就只要是正數便可做.一般計獨立項目時,用任何一個都冇分別.

但如果公司要係兩個項目,只做一個,例如做晒兩個吾夠錢,便要比較兩個項目,那個較吸引,這時便要用NPV,以最大為優,因為代表賺取最高收入,即使這個項目IRR較另一個項目少.








2009-08-17 18:07:29 補充：
IRR is focused on how much percentage the project can earn, when the project has the hurdle rate would be smaller than IRR rate , this project should be taken.

NPV is focused on how much money the project can earn, when the NPV is over zero,this project should be taken.

2009-08-17 18:07:55 補充：
In general ,IRR and NPV will have the same result,because when the project can make profit , it means this project's IRR rate must be higher than huddle rate. it also means when this project's IRR rate smaller than hurdle rate , and it's NPV must be negative.

2009-08-17 18:08:39 補充：
In the reality . company can not take all project by limited capital. so company have to pick up the better one.

2009-08-17 18:09:01 補充：
Company may encounter the situation like this ,project A' IRR would be 20%, NPV would be $1000. Project B ' IRR would be 15% , NPV would be $1200 .
In this case , company should pick up project B by higher amount.

2009-08-17 18:09:16 補充：
why the conflict appears on some case like above ? because IRR is ignoring any investment amount . so when project B has a bigger investment amount than
Project A ,Project B can be better than Project A even Project B' IRR smaller than Project A

敬請閣下可否把中文翻譯英文 感謝 多謝 謝謝 ^.^