Ranking order of NPV, IRR and PI ???

[afrika]

hello, I have multiple questions and would ask in different threads.

Am writing a project that evaluates capital budgetting, In making business analysis.

Would NPV, PI and IRR ( net present value, profitability index and internal rate of return ) All yeild the same ranking order, in evaluating a business ?

And under what sitautions might they achieve different rankings ?



MY ASSUMPTIONS
I assume, if a business has a high NPV ( which i understand is the most important ) but falls short in its IRR. It should be rejected ? right ?

And how are these 3 related ?

 

[Vicarious]

They are different things, you have to apply a chosen percentage to get your NPV whereas an IRR calculation gives you a percentage

I always think IRR is used for an intended course of action - I want to buy a lorry, what IRR will it yield, is it a higher IRR than buying a printing press or a combine harvester. It gives you a comparable rate so that actual amounts dont confuse the calculation

NPV I always think is about valuing the today value of an existin operation based on future cash flows. You apply a chosen discount value which would say be cost of money plus a risk factor