Abstract：The thesis introduces the net present value method and the internal rate of return method which are most commonly used in the long term investment of pump enterprises. Specific cases are analysed to show that using the two methods sometimes may result in different decisions. Which method should decision-makers choose? Then the thesis compares and analyses the two common methods, and finds out least three defects in internal rate of return method: it has an improper opportunity cost hypothesis; it violates additional value principle; one project can work out several internal rate of return. Through comparison and analysis, the conclusion is drawn that net present value method is the suitable method of pump enterprises long-term investment decision.
