NPV Or IRR? Why Not Both? (d5648446-7f8d-4e8f-bd84-e1fb937dd64c)

The primary merit criteria used by the mining industry is internal rate of return (IRR) rather than net present value (NPV) although NPV is favored by academicians. This paper discusses the problems with IRR and NPV and compares the multi-goal nature of decision makers and their need for information with the characteristics of NPV and IRR. Conclusions are that both NPV and IRR are needed for investment ranking, that NPV suffers the same multiple root problem as does IR.R, and the determination of incremental IRR to reach NPV consistent project ranking is misguided in practice.