A value of possible required discount rate which nullifies the project's NPV to nullify the expected NPV of the Investment Project:
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\mbox{NPV} = \sum_{i=0}^n \frac{R_i}{(1+\mbox{IRR})^i} = 0 |
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The corporate investment policy usually dictates that:
investment projects with
- Investment Projects with IRR < WACC should be rejected
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- Investment Projects with higher IRR should have a financing priority over
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- the Investment Projects with lower IRR
See also
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Economics / Investment / Financial Investment / Financial Investment Metrics
[ Financial Investment Project ]
[ Weighted Average Cost of Capital (WACC) ] [ Cash Discount ] [ Net Present Value (NPV) ]
[ Modified Internal Rate of Return (MIRR) ]