Done

Also, they also differ in terms of outcome. This is because the method of NPV results in dollar values produced by the project; on the contrary, IRR cause the return percentage that the project is anticipated to develop. They also differ in decision making where the NPV technique present the result that used for decision making on investment, because it gives a dollar return (Accountingtools, 2018). On the contrary, the IRR technique does not assist to make this decision because its return percentage does not inform the person investing the amount of cash that will be generated. They also differ in terms of purpose where the NPC technique concentrates on the surpluses of the project and on the contrary IRR concentrates on project’s breakeven cashflow level.

Both also differ in terms of reinvestment rate, the supposed rate of return for the mid cash flows reinvestment in the organization’s cost of capital when the NPV is utilized, whereas it is the IRR under the technique of IRR. They also differ in terms of discount rate issues, the technique of NPV needs the utilization of a discount rate, and it may be challenging to obtain, because management may need to modify it depending on the levels of risk that are perceived. There are no such challenges with IRR method, because the rate of return is merely obtained from the cashflows that are underlying. In general, NPV is a technique that is mostly used. IRR tends to be supplied as an added information and calculated as a part of process of capital budgeting.

2. The shareholder's wealth maximization that is being concerned by the company's management is ethical for many rationales. Some of these reasons include the concern of the environment where the shareholders continue to practice the objectives and goals additionally to the maximization of the wealth. Also, other companies being aggressive to the stakeholders. It also involves the management agents practicing their objectives such that the shareholders will not suffer the behavioral problem.

3. The factor that takes part in the benefit of the ethical organizations even with the less capital cost is the enhanced and recognition goodwill of the organization, positions of stronger aggressiveness, cost and reduced hazards, and expanded access to the deposits. Also, a foreign investment with its capital and the international respect all contribute to the benefit of the ethical organization than less ethical companies (MICHAEL VOLKOV, 2014).

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