61K Learn about the internal rate of return. Understand what the IRR is, identify the problems with the IRR, and examine the importance of the NPV and the IRR. Related to this QuestionIs the internal rate of return the discount rate? Is internal rate of return the same as effective rat...
Since this project’s IRR is equal to the company’s WACC, its NPV must be zero if the cash flows are discounted at the WACC. If the cash flows are discounted at a rate higher than the WACC to account for the project’s higher risk, the NPV must be negative. Therefore, the project...
Weighted average cost of capital (WACC) is determined based on the cumulative funds of source, debt, and equity. Discover how WACC is weighed against the estimated rate of returns to determine a business' profitability. Related to this QuestionExplain...
IRR: The internal rate of return is an indicator of a project's profitability in capital budgeting. It is the discount rate that renders the net present value of all cash flows from a particular investment portfolio equal to zero. Answ...
Project ABC's profitability index is equal to 1.00 (PI = 1) and the discounted payback period is 3.75 years. If the required rate of return is equal to 10%, what is the IRR? a. 10.0% b. ...
years, its salvage value will equal zero. If the company goes ahead with the proposed product, it will have to invest $1million in NWC in Year0. At Year6,the net operating working capital will be recovered after the proje...
The IRR of 5.2% is also above the WACC of 2.27%.问题补充:匿名 2013-05-23 12:21:38 正在翻译,请等待... 匿名 2013-05-23 12:23:18 的内部回报率是5.2%以上的加权平均资本成本也的2.27%。 匿名 2013-05-23 12:24:58 IRR 5.2%也在WACC 2.27%之上。 匿名 2013-05-23 12:26:38 ...
What Is IRR? An internal rate of return can be expressed in a variety of financial scenarios. In practice, an internal rate of return is a valuation metric in which thenet present value (NPR)of a stream of cash flows is equal to zero. ...
In much the same way, in the case of IRR the reinvestment rate for intermediate cash flows is not necessarily be equal to IRR. The conclusion is that reinvestment assumption is a wrong belief. We also show that MNPV and MIRR formulas contain erroneous restrictive assumptions about the discount...
WACC is a benchmark that presents the minimum return a company must generate on its projects to satisfy its shareholders and debt holders. When a company evaluates new projects, using WACC plus the risk premium ensures that these initiatives are expected to yield returns at least equal to the ...