Step-by-step explanation

Year      Project A            Project B             Difference

0             -$84,500              -$76,900              -$7,600

1             $29,000                 $25,000                $4,000

2             $40,000                 $35,000                $5,000

3             $27,000                  $26,000                $1,000

 

Incremental IRR is as calculated:

NPV = $7,600 = 0/(1+r)^1 + $4,000/(1+r)^2 + $5,000/(1+r)^3 - $1,000/(1+r)^3

On solving this, we get the incremental irr = 17.90%

What"s the r value in the equation?? Can you show me how this equals 17.90%

E. 17.90 %

Answer rating: 100% (QA)

To find the value of r in the equation we need to solve the equation f... View the full answer