CISI Corporate Finance Technical Foundations Practice Questions - CISI Corporate Finance Technical Foundations Exam

NPV does not take the time value of money into account, whereas IRR does. NPV is a relative measure of profitability, whereas IRR is an absolute measure of dollar value added. NPV calculations require the project's internal rate of return as an input, whereas IRR does not. NPV assumes reinvestment at the cost of capital, whereas IRR assumes reinvestment at the project's internal rate of return.