> NPV, IRR, PV
> IRR and NPV evaluation methods of mutually exclusive projects (free)
IRR and NPV evaluation methods of mutually exclusive projects (free)
This model provides Guide to IRR and NPV evaluation methods of mutually exclusive projects.
The model takes a look at two mutually exclusive projects:
Project A with higher IRR than Project B
Project B with higher NPV than Project A.
If I look at IRR method only, I would accept Project A because of higher IRR. However, NPV shows that if I accept Project B I would receive more dollars.
In this case, I need to look at IRR of incremental flows. I need to ask myself if it worth making additional investment in project B?.
The model will provide clear step-by-step instruction on what requires your input in order to evaluate projects.
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