标题: NPV included in the IRR calculation? [打印本页] 作者: slackeranalyst 时间: 2011-7-11 18:24 标题: NPV included in the IRR calculation?
Let's say I'm given a series of cash flows and given an NPV.
If I'm asked to give the IRR, then the NPV has nothing to do with that right?
series of cash flows
-100
100
50
30
NPV is given as 54.7708.
Through backward induction, I figure out the IRR is 10%.
However, if I just calculate the IRR for the project without the given NPV, the IRR is 47.6323
What's the correct IRR?作者: jim8z3 时间: 2011-7-11 18:24
Homie, use your BAII + for these dude. Straight up this should be a 20 second question.
CFo = -100
CF1 = 100
CF2 = 50
CF3 = 30
IRR = 47.6323
Dont bother with backward induction.作者: siavosh 时间: 2011-7-11 18:24
The NPV is given just to confuse you.作者: farrukhsadiq 时间: 2011-7-11 18:24
IRR is when the NPV = 0....and yes just a simple calculator question, except there are unconventional cash flows...then you need to be aware of possible MULTIPLE IRR'S...in which the calculator doesn't show (atleast that I'm aware of)
You better make sure you understand this section...I'm sure there will be some theory in NPV, IRR, payback period et cetera...NPV profile is a good thing to fully understand as well....
make sure to go through the advantages/disadvantages of NPV vs IRR for mutually exclusive and independent projects...
