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  • Project Comparisons

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    Akash Kumar
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    The document presents the cash flows and IRR for 3 alternative projects (D1, D2, D3) over 4 periods. It then calculates the incremental cash flows and IRR between each pair of projects to determine which has the highest incremental return. The incremental IRR between D1 and D2 is 27.61%, between D1 and D3 is 8.80%, and between D3 and D2 is 17.20%, indicating D1 has the highest incremental return over D2.

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    Project comparisons.xlsx

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    The document presents the cash flows and IRR for 3 alternative projects (D1, D2, D3) over 4 periods. It then calculates the incremental cash flows and IRR between each pair of projects to determine which has the highest incremental return. The incremental IRR between D1 and D2 is 27.61%, between D1 and D3 is 8.80%, and between D3 and D2 is 17.20%, indicating D1 has the highest incremental return over D2.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    2 views2 pages

    Project Comparisons

    Uploaded by

    Akash Kumar
    The document presents the cash flows and IRR for 3 alternative projects (D1, D2, D3) over 4 periods. It then calculates the incremental cash flows and IRR between each pair of projects to determine which has the highest incremental return. The incremental IRR between D1 and D2 is 27.61%, between D1 and D3 is 8.80%, and between D3 and D2 is 17.20%, indicating D1 has the highest incremental return over D2.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Incremental IRR with 3 alternatives Period

    Period D1 D2 D3 0
    0 -2000 -1000 -3000 1
    1 1500 800 1500 Rate 0.1 2
    2 1000 500 2000 3
    3 800 500 1000

    NPV $791.13 $516.15 $767.84


    IRR 34.37% 40.76% 24.81% Period
    a c b 0
    1
    2
    These are mutually exclusive projects
    and hence we need to calculate 3
    incremental cashflows

    Period
    0
    1
    2
    3
    D1 D2 Increment
    -2000 -1000 -1000
    1500 800 700
    1000 500 500
    800 500 300
    Incrementa 27.61%

    D1 D3 Increment
    -2000 -3000 1000
    1500 1500 0
    1000 2000 -1000
    800 1000 -200
    Incrementa 8.80%

    D3 D2 Increment
    -3000 -1000 -2000
    1500 800 700
    2000 500 1500
    1000 500 500
    Incrementa 17.20%

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