CAPITAL BUDGETING II: ADDITIONAL ASPECTS
Size-disparity Problem This arises when the initial investment in projects under consideration is, mutually exclusive projects, is-different. The cash outlay of some projects is larger than the others. In such a situation the NPV and IRR will give a different ranking....
CAPITAL BUDGETING II: ADDITIONAL ASPECTS
NPV and IRR Methods: Differences Thus, in the case of independent conventional investments that NPV and IRR methods will give concurrent results. However, in certain situations they will give that, if the NPV method finds one proposal acceptable, IRR favor another....
CAPITAL BUDGETING II: ADDITIONAL ASPECTS
NPV and IRR Similarities The two methods-IRR and NPV would give consistent results in terms acceptance or rejection of investment proposals in certain situations. That is, if a project is it will be indicated by both the methods. If, however, it does not qualify for...
CAPITAL BUDGETING II: ADDITIONAL ASPECTS
NPV, IRR, PROFITABILITY INDEX METHODS-A COMPARISON NPV vs. IRR Methods The NPV and IRR methods would in certain situations give the same accept reject decision. But y also differ in the sense that the choice of an asset under certain circumstances may...
CAPITAL BUDGETING II: ADDITIONAL ASPECTS
CAPITAL BUDGETING II: ADDITIONAL ASPECTS INTRODUCTION The simple accept-reject investment decisions with primarily conventional cash flows were in the preceding Chapter. A firm generally faces complex investment situations and has to among alternatives. The valuation...
