... =0. In this situation, it will be difficult to choose a suitable project if the cost of capital is between two IRR. This conflict never happens when using NPV technique because each discounted rate has only one positive or negative NPV (Colin Durry, 2001). The IRR method requires a cost of capital to compare to select a project. Therefore, this may be a big problem when ... business entity does not choose the cost of finance. NPV on the other hand does not need a rate of return to compare. It can be used to calculate at many discounted rate and then only comparing between positive NPV an...

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... is to accept a project if its payback period is substantially less than its economic life (or its payback period is less than the alternatives). The discounted payback method finds the number of years required for the discounted cash inflows to cover the cost of the project. Based on the payback rule, an investment is acceptable if its calculated payback period is less ... ...

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