NPV is calculated by discounting the cashflows
PV = C/(1+r)^n
C - Cashflow
r - Discount rate
n - years to the cashflow
IRR is the rate at which NPV = 0
0 = Initial investment + 2200000/(1+0.113)^1 + 4125000/(1+0.113)^2 + 4125000/(1+0.113)^3 + 4125000/(1+0.113)^4
Initial Investment = $10986485.87
NPV @ 9%
NPV = 10986485.87 + 2200000/(1+0.09)^1 + 4125000/(1+0.09)^2 + 4125000/(1+0.09)^3 + 4125000/(1+0.09)^4
NPV = $611303.58
- Project's IRR will decrease, if the cashflows decrease.
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