The Analysis of NPV and IRR and Its Alternative Methods

Abstract

Based on the analysis of the net present value method and the internal rate of return method, this paper lists the pros and cons of these two different investment rules and gives some alternative approaches. With improvement and optimization, these two investment rules can be more efficient convenient, and widely used than before. This essay further enriched and developed the internal rate of return and net present value rules by analyzing the advantages and disadvantages of the measurement methods in detail. In addition, it provides implications for investors to better evaluate the corporate or project value.