Differentiate between NPV and IRR

1.NPV or Net Present Value is a tool used to determine whether a project is worth the investments made. IRR or Internal rate of return is a formula used to calculate your investment’s profitability. Basically, it is the rate of return at which NPV is zero.

2. IRR assumes that the cash flows are reinvested in the projected at the same discount rate. This is a major limitation for the use of IRR. NPV makes no such assumption.// 3. NPV is measured in terms of currency whereas IRR is measured in terms of expected percentage return.