Thank you for the opportunity to help you with your question!
the IRR is the most efficient method of identifying the NPV of the cash flow. The
IRR (Internal Rate of Return) refers to the discount rate that delegates the
NPV to zero. It is a process that identifies the cash inflows and outflows. The
important thing is that it relies on the functions of the inflows and outflows
that characterize a process. Generally speaking, when the project IRR is
higher, the more feasible it is when undertaken. As such, it is a good method
of ranking several prospective projects that are being considered by a firm. Assuming
that all factors are held constant among the projects, the one that registers
the highest IRR is taken as the best and undertaken first.
I hope you are satisfied with my answer. Please let me know if you need any clarification. I'm always happy and ready to answer your questions.
Nov 30th, 2015
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