ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Net Present Value versus Internal Rate of Return-A Comment

Rate of Return A Comment Let us see whether the IRR calculations depend in any way on the reinvestment assumption which they regard as crucial:
Project A IN 'Net Present Value versus Internal Rate of Return' (November 27, 1971, pp M-153-6), Rangarajan and Mampilly express the view that while both the Net Present Value (NPV) and the Internal Rate of Return techniques have an underlying implicit assumption about re-investment of the cash flows generated during the life-time of a project, the main difference between them lies in assuming different re-investment rates. To quote them:

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