NPV vs IRR

Today was the first class in Corporate Finance. The Professor is really good. Excellent in teaching. He, however, warned that things will look simpler during the class but unless we work out the practice problems, we will be doomed... :(

Some key takeaways:

1) Differences between real and nominal interest rate. (nominal = real + inflation). Real interest rate will always be positive as long as the economy is productive.
2) Different types of valuation: NPV (net present value), IRR (internal rate of return), Payback and discounted payback and Book rate of return. NPV is by far the best way to value the present value (PV) of an investment.
3) Cash flow = EBIT + Dep & Amortization - Increases in net working capital - CapEx + Proceeds from Asset sales - Realized cap gain taxes + Realized cap loss savings - EBIT*Tax rate
4) "All valuations involve comparisons".