IRR

Discount rate that makes NPV of all cash flows equal to zero.

For mutually exclusive projects, NPV and IRR can give conflicting rankings. NPV is a better measure in such cases.

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Q: If I have to invest today $2,000 for a project which gives me$100 next year, $200 the next, and$250 after that till perpetuity, should I make this investment?
Cost of Capital = 10%.