Growth and debt are highly related to each other in business, and as a company gets

bigger, the amount it owes its creditors can often increase substantially. With a good
business model and healthy risk management, this is rarely a serious problem.

Without sufficient risk management, or with a business model that simply doesnt work
when grown beyond a certain point, taking on more debt to fuel growth can lead to a
cash flow crisis.

NPV

Net Present Value is the calculation of present value of cash inflows minus present
value of cash outflows, where present value defines what will be the worth of
future sum of money as of today.
Positive NPV = accept project and vice versa.

Advantages
Time value of money is given more
importance. Value of money today is more
than that received in a year.
Projects profitability and risk factor are
given high priority
Helps maximise wealth as it will show
whether returns are great than its cost
of capital or not.
Takes into consideration both before and
after cash flow over the life span of a
project.
Disadvantages
May give inaccurate decision when the
two or more projects are of unequal life.
No clarity on how long a project will
generate positive NPV due to simple calc.
Suggests to accept the investment plan
which provides positive NPV but doesnt
provide an accurate answer at what
period of time the positive NPV will be
achieved
Calculating appropriate discount rate for
cash flows is difficult.
IRR

You can use this approach as an alternative method to NPV. This method entirely
depends on estimated cash flows as it is a discount rate which tries to make NPV of
cash flows of a project equal to zero.

If you are using this method to make a decision between two projects, then accept the
project if the IRR is greater than the required rate of return.

Advantages
This approach is mostly used by financial
managers as it is expressed in percentage
form so it is easy for them to compare to
the required cost of capital.
It will provide you an excellent guidance
on a projects value and associated risk.
IRR method gives you the advantage of
knowing the actual returns of the money
which you invested today.
Disadvantages
IRR tells you to accept the project or
investment plan where the IRR is greater
than weighted average cost of capital but
in case if discount rate changes every
year than it is difficult to make such
comparison.
If there are two or more mutually
exclusive projects (they are the projects
where acceptance of one project rejects
the other projects from concern) than in
that case too IRR is not effective.