Ranking Investments with Internal Rate of Return and Benefit - Cost Ratio: A Revision

The purpose of this paper is to present a procedure to include the implicit assumptions of Net Present Value NPV in the Internal Rate of Return, IRR, and the profitability index (benefit-cost ratio B/CR). The resulting indicators are the weighted IRR (WIRR) and the expanded B/CR (EB/CR). These two desirability measures have the property to coincide with the NPV ranking for investment analysis and hence, will maximize value. Examples are presented.

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Year of publication:	2011-01-24
Authors:	Pareja, Ignacio Velez
Institutions:	MASTER CONSULTORES
Subject:	Net Present Value \| NPV \| Internal Rate of Return \| IRR \| Benefit-Cost Ratio \| B/CR \| Profitability Index \| NPV Assumptions

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Series:	PROYECCIONES FINANCIERAS Y VALORACION.
Type of publication:	Book / Working Paper
Notes:	1 pages long
Classification:	D92 - Intertemporal Firm Choice and Growth, Investment, or Financing ; E22 - Capital; Investment (including Inventories); Capacity ; E31 - Price Level; Inflation; Deflation ; G31 - Capital Budgeting; Investment Policy
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010762972