A positive NPV indicates that the investment return exceeds the weighted average cost of capital and a negative NPV indicates that the investment return is below the WACC. The IRR reflects the average annual investment return if the set value is included as the initial capital outlay in the calculation. The IRR is basically the discount rate which would result in a zero (break-even) net present value and the difference between the IRR and WACC basically represents the value difference in the NPV when setting the specified value as the selling price of a business or acquisition price of a business.

CopyFinancial > A positive NPV indicates that the investment return exceeds the weighted average cost of capital and a negative NPV indicates that the investment return is below the WACC. The IRR reflects the average annual investment return if the set value is included as the initial capital outlay in the calculation. The IRR is basically the discount rate which would result in a zero (break-even) net present value and the difference between the IRR and WACC basically represents the value difference in the NPV when setting the specified value as the selling price of a business or acquisition price of a business.