Why would a firm use NPV for analysis of proposed projects rather than IRR?
They would not because IRR gives a percentage return.
They would because NPV is more theoretically correct.
They would not because IRR is more theoretically correct.
It does not matter which technique is used as they are equal.
Jake wants to buy a new truck and he has saved $2,550 for a down payment and can make monthly payments of $475. The dealer will finance the truck over 60 months at 1.55% interest with monthly payments. Jack wants a truck costing $30,000; can Jake afford the truck?
Yes; he will have about $30,707 No; he will have about $29,957 Yes; he will have exactly $27,407 Yes; he will have only about $35,568.00.