Academics warn practitioners about overusing of IRR, and, nevertheless, IRR remains probably the most popular measure. What is making the IRR so attractive? And what are the “dangers” of using IRR without NPV?

Description

Provide a response to the following

Page 1

You have just been made a valuation analyst. Before you get training (what else is new!), your boss asks you to value a number of items:

1) a publicly-traded company;

2) a family business;

3) a shopping center;

4) an oil refinery;

5) a patent or trademark; and, by the way,

6) did the local tax assessor correctly value his house? How might you go about these tasks?

Page 2

Academics warn practitioners about overusing of IRR, and, nevertheless, IRR remains probably the most popular measure. What is making the IRR so attractive? And what are the “dangers” of using IRR without NPV? You may use the textbook as your starting point, but give your own examples, when using IRR as an investment criterion would lead, in your opinion, to a wrong decision.

Last Completed Projects