ParNPV vs IRR
NPV tells you how much value an investment adds at your required return. IRR tells you the return the investment itself earns.
When they agree
For a single project with an upfront cost followed by returns, they always agree: NPV is positive exactly when IRR is above your required return. The project in the NPV and IRR guides has a positive NPV at 10% and an IRR just above 10%.
When they disagree
Comparing projects of different size or length, IRR can rank them differently from NPV. A small project with a 30% IRR adds less value than a large one at 15% if your required return is 10%. NPV measures value in dollars, so it ranks correctly.
Flows that change sign more than once can have several IRRs, or none. NPV is always a single number.
In practice
Use NPV to decide. Use IRR to communicate, since a percentage is easy to compare against a cost of capital. Work out both: once the flows are entered, it’s just fNPVPV and fIRRFV.