公司理财精要chap008.pptVIP

8-* NPV Summary Net present value = Difference between market value (PV of inflows) and cost Accept if NPV 0 No serious flaws Preferred decision criterion 8-* IRR Summary Internal rate of return = Discount rate that makes NPV = 0 Accept if IRR required return Same decision as NPV with conventional cash flows Unreliable with: Non-conventional cash flows Mutually exclusive projects MIRR = better alternative 8-* Payback Summary Payback period = Length of time until initial investment is recovered Accept if payback some specified target Doesn’t account for time value of money Ignores cash