The IRR method has many deficiencies and foremost of them is the existence of multiple IRRs to a cash flow series.  In this book, an effort has been made to understand the deficiencies of the IRR, NPV and MIRR methods and to find solutions for these deficiencies.  The multiple IRRs occur because of an inherent assumption in the application of the IRR method.  The assumption is that the cost of borrowing and the rate of return on investment are equal.  Because of this false assumption, we may get multiple IRRs or we may not get an IRR.  Even if we get a single IRR, that may not be the correct IRR.  A new method has been developed to solve the problem of multiple IRR without loosing the advantages of the IRR.  The new method has been termed as “TrueIRR”. 

        There have been never ending debates on the superiority of the IRR over the NPV and vice versa.  The relationship between the IRR and the NPV and the solution for the conflicting results are given in this Book.  Financial theorists argue that the conflicting results occur due to the ‘reinvestment assumption’ implicit in all methods using the discounted cash flow technique.  It has been found that the IRR method simply involves finding a compounded rate of interest and nothing more.  In the case of certain series, the NPV may oscillate between positive and negative.  A new method is developed to solve this problem and the same is termed as “TrueNPV”.

Arrangement of Chapters

        The summary of findings is given in the biginning under the heading “TrueIRR”.  The detailed explanations are given in various chapters.  Each chapter is divided into sections.  Sections, illustrations, tables and graphs in each chapter are serially numbered and first part of the number represents the Chapter number and the second part represents the serial number. 

        The problem of multiple IRR to a cash flow series and the oscillating NPV is explained in Chapter 1.  ‘Cumulative future value’ is the tool with the help of which we will be able to solve the problem of multiple IRRs.  The concept of ‘cumulative future value’ is explained Chapter 2.  In Chapter 3, the issue of classification of the series is discussed.  The classification will help us to identify the class of series for which the application of IRR and NPV methods will yield illogical result.  In Chapter 4, reasons for the occurrence of multiple IRRs are explained.  The new method of TrueIRR, which solves the problem of multiple IRRs, is explained in Chapter 5.  In Chapter 6, new concept “margin value” is explained.  These concepts help us to understand the relationship between IRR and NPV.  The applications of TrueIRR are explained with examples in Chapter 7.  The MIRR method is not a solution to the problem of multiple IRRs and reinvestment assumption in IRR method is a misconception.  These subjects are discussed in Chapter 8.  Reasons and solution for the problem of NPV fluctuating from positive to negative and vice versa are given in Chapter 9.  In Chapter 10, certain typical series like series without IRR, series with negative IRR etc., are given with reasons for their occurrence.  In Chapter 11, the algebraic proofs for new formulas are given. 

        I am grateful to my friends who have contributed by various means to bring out this Book.  Comments are always welcome.