Net Present Value is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used to determine if the expected rate of return is greater than the required rate of return.
The Internal Rate of Return is a measure of an investment’s rate of return that excludes external factors, such as the risk-free rate, inflation, the cost of capital, or various financial risks.
Watch and learn how to calculate Net Present Value and Internal Rate of Return.
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