Research on the Methods of Investment Project Evaluation: Comparison of NPV, IRR and MIRR

Research Article
Open access

Research on the Methods of Investment Project Evaluation: Comparison of NPV, IRR and MIRR

Haoran Sun 1*
  • 1 Tianjin University of Science and Technology / Southern Cross University    
  • *corresponding author 19204405@mail.tust.edu.cn
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/15/20230944
AEMPS Vol.15
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-73-7
ISBN (Online): 978-1-915371-74-4

Abstract

Which one of Net Present Value and Internal Rate of Return is better to use in different fields is the focus of current research. This paper analyzes the limitations and uniqueness of the use of NPV and IRR based on current research. The research topic of this paper is the relationship and difference between NPV and IRR. The research method of this paper is as follows: firstly, through the description of NPV and IRR respectively, then collect the data and examples used by NPV and IRR, secondly analyze the data and examples, and finally, this study found that in different situations, the use of IRR and NPV also has different advantages and disadvantages, and there is still a gap in the comparative analysis of the use of NPV and IRR in different situations. Therefore, this paper will supplement the gaps in the comparison of NPV, IRR and MIRR with an analysis.

Keywords:

investment project evaluation, NPV, IRR, MIRR

Sun,H. (2023). Research on the Methods of Investment Project Evaluation: Comparison of NPV, IRR and MIRR. Advances in Economics, Management and Political Sciences,15,346-352.
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References

[1]. Wang Shiwei. Consistency and contradiction analysis of NPV and IRR[J]. Friends of Accounting, 2009(05):87-89.

[2]. Chen Changyun. Comparative Analysis of Capital Budgeting Methods[J]. SME Management and Technology (First Issue), 2009(12):79-80.

[3]. Bosch, Maria-Teresa; Montllor-Serrats, Joan; Tarrazon, Maria-Antonia. Journal of Applied Finance; Tampa Vol. 17, Iss. 2, (Fall 2007): 41-45.

[4]. Sun Shulei, Xu Bin, Wang Haiyan. Revision and comparison of IRR[J]. Statistics and Decision, 2010(01):64-66.

[5]. Geng Xiuyan. Analysis of the contradiction between NPV and IRR in investment decision-making[J]. Journal of Huaibei Vocational and Technical College,2010(04):25-26.]

[6]. Finance Management, https://efinancemanagement.com，last updated on: June 2, 2022

[7]. Xu Haoran, Wu Xiaozhen. Application of NPV and IRR in Investment Decision-making[J]. Modern Business, 2010(18):128.

[8]. Liu Jiajin. A Brief Discussion on MIRR Evaluation Method and Its Application——Based on the Perspective of Comparison with IRR Method[Z]. Proceedings of the 2012 Annual Conference of the Financial Management Committee of the Accounting Society of China and the 18th Annual Conference of the Chinese Accounting Society, 2012.)

[9]. Sun Zhaoliang. Application limitations of internal rate of return rule (IRR) and related amendments [J]. Qilu Pearl altar, 2013 (04): 37-39.

[10]. Du Chengxiang. Application of revised IRR in economic evaluation[J]. China Water Transport (Theory Edition), 2006(12):122-124.]

Cite this article

Sun,H. (2023). Research on the Methods of Investment Project Evaluation: Comparison of NPV, IRR and MIRR. Advances in Economics, Management and Political Sciences,15,346-352.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-73-7(Print) / 978-1-915371-74-4(Online)
Editor：Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.15
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Wang Shiwei. Consistency and contradiction analysis of NPV and IRR[J]. Friends of Accounting, 2009(05):87-89.

[2]. Chen Changyun. Comparative Analysis of Capital Budgeting Methods[J]. SME Management and Technology (First Issue), 2009(12):79-80.

[3]. Bosch, Maria-Teresa; Montllor-Serrats, Joan; Tarrazon, Maria-Antonia. Journal of Applied Finance; Tampa Vol. 17, Iss. 2, (Fall 2007): 41-45.

[4]. Sun Shulei, Xu Bin, Wang Haiyan. Revision and comparison of IRR[J]. Statistics and Decision, 2010(01):64-66.

[5]. Geng Xiuyan. Analysis of the contradiction between NPV and IRR in investment decision-making[J]. Journal of Huaibei Vocational and Technical College,2010(04):25-26.]

[6]. Finance Management, https://efinancemanagement.com，last updated on: June 2, 2022

[7]. Xu Haoran, Wu Xiaozhen. Application of NPV and IRR in Investment Decision-making[J]. Modern Business, 2010(18):128.

[8]. Liu Jiajin. A Brief Discussion on MIRR Evaluation Method and Its Application——Based on the Perspective of Comparison with IRR Method[Z]. Proceedings of the 2012 Annual Conference of the Financial Management Committee of the Accounting Society of China and the 18th Annual Conference of the Chinese Accounting Society, 2012.)

[9]. Sun Zhaoliang. Application limitations of internal rate of return rule (IRR) and related amendments [J]. Qilu Pearl altar, 2013 (04): 37-39.

[10]. Du Chengxiang. Application of revised IRR in economic evaluation[J]. China Water Transport (Theory Edition), 2006(12):122-124.]

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