The net present value model differs from the IRR model in that it does not show the project's unique rate of return.

Question

Quizplus · Accepted Answer

The net present value (NPV) model calculates the present value of future cash flows minus the initial investment, showing the project's value in currency terms, whereas the Internal Rate of Return (IRR) model calculates the unique rate of return at which the NPV equals zero, showing the project's profitability as a percentage.

The Net Present Value Model Differs from the IRR Model