![]() This is kind of like the reverse IRR formula. You'd use the information from the IRR to compare the return that this project offers to those that other projects would offer-many firms have a threshold IRR, they won't invest in a project if it's below a certain level because they can get more profitable investments elsewhere.įor your second question, you'll want to do a net present value calculation, which you can do with the NPV function. Higher IRR/ROI/DR projects are more profitable than others. The IRR shows what return on investment (functionally equivalent to a discount rate if you're more familiar with that term) you'll get from this project. ![]() This isn't really an excel question, so you might try a finance subreddit or just google IRR or NPV, but here's my attempt at an answer:
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