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In this video, I explain WHY NPV and IRR are consistent with each other, i.e. why accepting a project based on NPV will also lead one to accept the project based on IRR. I explain the intuition behind this consistency, and also emphasize that this consistency ONLY holds for projects with conventional cash flows.
Viewing and understanding this video will especially help students understand the conditions under which they cannot reliably use IRR rule to make an investment decision.
ABOUT ME:
My name is Atif Ikram. I am a Clinical Professor of Finance at Arizona State University, where I teach courses in Corporate Finance, Personal Finance, Real Estate Finance and Investments (wpcarey.asu.ed....
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