NPV and IRR: Rigorous Project Evaluation

Net present value and internal rate of return are the two numbers a finance director actually expects to see on a capital request, and between them they answer the two questions payback cannot: does this project create value, and what return does it earn? Both are built directly on the discounting from the previous lesson. This lesson defines them, works the example that catches a payback-approved loser, and settles when to use which.