Consensus and contrdiction between internal rate of return and net present value in comparing two mutually exclusive projects

Abstract EN

This paper is intended to study the similarities and differences between the methods of internal rate of return IRR and net present value NPV when comparing two mutually exclusive projects for investment under certainty, and selecting appropriate alternatives.

The framework of this paper is based on a detailed literature review of net present value (NPV) approach and the internal rate of return analysis.

Furthermore, the paper investigates the consensus between NPV and IRR in the normal situations where they both give similar results as well as discussing the cases of contraditions that may occur between the two parameter and the reason behind that, and suggests the solutions when this contradiction takes place