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While nature loves symmetry inasmuch as many natural laws remain invariant under various transformations, description of the natural diversity warrants some kind of breakdown of symmetry. Such a breakdown of symmetry may be either explicit or spontaneous. Many significant developments have taken place in recent times in diverse fields of study. Algorithmic information theory has been formulated by Kolmogorov and others. Spontaneous breakdown of symmetry and its use in the standard model of particle physics, discovery of the Higgs Boson are all notable events. Work of Ilya Prigogine to accommodate biological self-organisation within the ambit of the second law of thermodynamics is also quite noteworthy. According to some, his principle of minimum entropy production has added a dynamic content to the second law of thermodynamics, which otherwise is viewed as a mere kinematic constraint. It appears that non-linear dynamics and the catastrophe theory of Rene Thom can play an important role to understand a sudden qualitative change of a dynamical system triggered by certain value of a parameter. Phase change of water subjected to external heating or change from a stable economy to one marked by trade cycles are examples of such sudden transitions. Advent of econophysics and behavioural finance has facilitated a new way of looking logically at the problems of finance and economics with the help of established physical laws as well as rigorous mathematical and statistical analyses. Importance of such an approach is evident from the sad plight of Louis Bachelier. In this article, it has been our effort to link up such apparently disjoint developments from diverse fields of study within the ambit of a single logically consistent framework. [ABSTRACT FROM AUTHOR]

In order that a project is considered acceptable for implementation, it has to satisfy the twin requirements of technical feasibility and financial viability. Financial viability of projects is evaluated by employing methods known as capital budgeting techniques. Internal rate of return (IRR) is one of the most popular capital budgeting techniques explored extensively by both practicing managers and academicians. IRR is thus a topic of paramount importance in the area of corporate finance. It appears that academicians apply the same set of decision criteria for evaluation of the financial viability of both investment projects and borrowing projects. Our analysis in this article, however, proves that a uniform set of decision criteria for both investment and borrowing projects is not at all a self-consistent requirement. The set of self-consistent IRR based decision criteria for borrowing projects can be formulated as under: 1. For any single/independent borrowing project, IRR > 0 but ≤ a suitable positive benchmark rate. 2. For mutually exclusive borrowing projects, among the projects with IRRs ≤ the positive benchmark rate, select the one with the lowest IRR. [ABSTRACT FROM AUTHOR]

NPV and IRR are essential components of Corporate Finance and are used for evaluating financial viability of investment projects. However, some serious issues have been raised about existence and uniqueness of IRR. While exploring such issues, we work out the necessary and sufficient condition for existence and uniqueness of IRR for any generalized scenario. Moreover, this condition is fulfilled by the projects considered by practicing managers. This explains why IRR delivers and is so popular among practicing managers. Further, certain applications of the Descartes Rule of Signs to estimate the number of IRRs are found to be erroneous. The correct approach in this regard is outlined, and it gives results consistent with our findings. Our analysis about the ranking of mutually exclusive projects reveals that, as a technique, IRR may claim a preference in this regard. [ABSTRACT FROM AUTHOR]