When cash flows are uneven and vary from year to year, the net present value method is easier to use than the internal rate of return method.

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The net present value method takes into account the timing and amount of each individual cash flow and discounts them back to their present value. This makes it easier to handle uneven cash flows. In contrast, the internal rate of return method calculates the rate of return that makes the present value of all cash inflows equal to the present value of all cash outflows. If cash flows are uneven, it can be more difficult to determine the internal rate of return.

When Cash Flows Are Uneven and Vary from Year to Year