Wednesday, March 11, 2015

What is the relationship between irr and net profit percent. is it necessary that irr should always be more than np percent?

What is the relationship between irr and net profit percent. is it necessary that irr should always be more than np percent?
IRR stands for internal rate of return and it is calculated based upon a series of cash flows over time. The discount rate that yields an NPV (net present value) of zero is the IRR. IRR is used in capital budgeting and investment analysis to assess the return over time from an investment made.
Net profit percent is an accounting measure that is calculated based upon one year or time period and it typically is net profit divided by sales or revenue. So the short answer is that there is no direct relationship between irr and np percent.

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