Step-by-step explanation Year Project A Project B
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Question:
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 %
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