**3. Flaws in use of discounted cash flow models for evaluation of engineering projects**

The net present value method principally does not contain any methodological assumptions or deficiencies that could impact the result of evaluation. However, the results are harder to understand in comparison to the percentage from the internal rate of return method. It would not be very meaningful if the investor were to determine that the net present value of a project or an investment were, for example, 25,000 EUR. It certainly may be difficult to compare this result with alternative investments, like real estate investment, bonds or cash deposits. It would be certainly more understandable if the result were expressed as a percentage of internal rate of return. This is probably the main reason that the internal rate of return method is often more popular.

In contrast to the net present value method, the theoretical findings identify numerous limitations connected with the internal rate of return method. The most significant are the following:

