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...... When the internal rate of return for the project exceeds what you would receive by lending, you will maximize wealth by making the investment, transforming current resources into future resources via direct investment rather than lending. NPV and IRR calculation are certainly highly educated deduction and invaluable tools when assessing return and risk factors associated with a project. Leveraging and debt structure are also major concerns when undertaking not only any capital investments, but in maintaining the structure and longevity of the organization as a whole. A project that has most of its cash flows in the early years, the NPV will not decline very much if the cost of capital increases, but if a project whose cash flows come in the later years it will be severely penalized by high capital costs. Similar to the risk imposed on long term bonds and the fluctuation of interest rates. If cash flows remain unchanged and the cost of capital fluctuates, IRR can change. NPV assumes that cash flows are reinvested at the cost of capital whereas the IRR assumes reinvestment at the IRR, and it is more likely, in a competitive world, that the actual reinvestment rate is usually the

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