The Introduction of NPV and IRR

Abstract

This paper aims to present the initial concept of NPV and IRR by an example of a question to calculate and answer the question for extending contexts of NPV and IRR from the example. Besides, the paper uses the formula to build each question's process, which makes a systematic solution for leading to other concepts of NPV and IRR. The main goal of this study is to introduce concepts of NPV and IRR by solving the question, proposing a hypothesis to help a reader logically and precisely understand the concepts of NPV and IRR. Meanwhile, it will show examples of NPV and IRR to illustrate and come up with our hypothesis. An extra part makes NPV and IRR, and two different methods companies use to determine the investment by understanding the advantages and disadvantages of NPV and IRR to help you decide which is the best for your company's situation. By investigating NPV and IRR, the context of the paper will be as methods to help people gain financial value.