Comparison of Net Present Value Model and Internal Rate of Return Model in Investment Decisions

The continued operation of a company cannot be separated from the right economic decisions. When making investment decisions, NPV and IRR models are often used due to their excellence. However, two sometimes yield different results when comparing selecting projects; After researching relevant literature, in this article, we give detailed introduction models, illustrate implications models. practical applications, do not always produce same outcomes, certain cases, contradictions can arise. This paper analyzes reasons for contradiction between through case studies, applicability order better apply them. study found that model produces inaccurate because its own insensitivity situations it comes projects sizes, return patterns or investing financing. But model, simple calculation indicators, is consistent with financial management objectives enterprise, assumptions relatively reasonable, there no problem multiple solutions solutions. using indicator indicator, conflicting obtained use should chosen assess viability projects.