Chapter 9. Internal Rate of Return
What is internal rate of return (IRR)?
How can I find the IRR of cash flows?
Does a project always have a unique IRR?
Are there conditions that guarantee a project will have a unique IRR?
If two projects both have a single IRR, how do I use the projectsâ IRRs?
How can I find the IRR of irregularly spaced cash flows?
The net present value (NPV) of a sequence of cash flows depends on the interest rate (r) used. For example, if we consider cashflows for projects 1 and 2 (see the worksheet IRR in the file IRR.xls, shown in Figure 9-1), we find that for r = 0.2, project 2 has a larger NPV, and for r = 0.01, project 1 has a larger NPV. When we use NPV to rank investments, the ranking of investments can depend on the ...
Get Microsoft® Excel Data Analysis and Business Modeling now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
