> Why is IRR when PV equal zero?

Why is IRR when PV equal zero?

Posted at: 2014-12-05 
I have trouble understanding this.

Even if the IRR is greater than the MARR, if the PV equals zero then it means you don't gain anything. So why would you invest?

Thanks!!

IRR is the discount rate at which the PV of future cash flow equals the Investment. The PV doesn't equal zero, the NPV equals zero. That means the Investment equals the future cash flow, discounted at a rate called IRR, that's all.

I have trouble understanding this.

Even if the IRR is greater than the MARR, if the PV equals zero then it means you don't gain anything. So why would you invest?

Thanks!!