Incremental IRR

[@Lexyvil]

I have a midterm tomorrow and you cleared a misconception I had, now I'm more confident than ever, thanks! It never occurred to me that you can get a new cashflow by comparing two cashflow, and that new cashflow had its own IRR called Incremental IRR.

[@relaxingdreamland6170]

If we had had such a teacher we would have done better results ever. Respect

[@Edspira]

Comments like these brighten my day!

[@khaledkakeesh9143]

for all the good things you have done for students all around the world you should be given a noble prize to be honest

[@JDMEVOVIGSR]

Nice work. A far better explanation that my lecturer provides at University!

[@rafaemalik1]

Saved me several hours of effort of reading through useless class notes. Thanks!

[@Edspira]

No problem!

[@DeeDee-oi1xz]

Thank you so much. Much simpler explanation than that in the book.

[@Edspira]

No problem!

[@OmittingNumber]

Thank you, you single-handedly saved an assignment problem for me #Hero

[@Edspira]

Happy to help! Glad you figured it out :)

[@luqmannoor2471]

what happens when there is salvage value in the cash flow?

[@aqvinasranasinghe3866]

Thank you so much !!!!!! Keep up the good work and we need more videos from you.

[@professorikram]

Professor - At one point you mention (as a Caveat) that you cannot say whether the two projects on a stand-alone basis are positive NPV. But that's not true, is it! Both the projects ARE positive NPV because their IRRs are greater than the given discount rate of 10%. Could you clarify what you mean by that caveat?

[@Dr0pbeardude]

God, these got me through my exams!

[@Edspira]

Excellent!

[@zainbukhari2151]

You told us that IIRR of this example is 29%. that is IIRR calculated to chose project 1 over project 2. What if we calculate it the other way around? as in find the IIRR to see of project 2 is profitable more than project 1. in which case there would be two different values of IIRR. Am I right? one IIRR would be high than the other one right? so, in this case, which project should I accept? Please answer my question. Thank you!!

[@Tewfik]

Great vid. I have one question though... my prof seems to really insist on having initial investments compared over NPV at most times. Would you consider initial investment as a make it or break it for a project? Thanks

[@johannesschmidt2003]

Well explained. Thank you.

[@auburn.JoaoDuarte]

The last part of this video made think how to calculate incremental NPV when the projects have different discount rates? I really want to know.

[@augurelite]

thanks!!!! I didnt really understand this from my prof's lectures, now it makes sense!

[@johnybravo3566]

Thank you!

[@Edspira]

You're welcome!

[@reservoirdograyh4n]

You are a saint. Thank you so much

[@yolandaosborne1848]

Well explained 👏🏾

[@martapaolelli8250]

Wow! Super clear video, thank you very much!

[@Edspira]

Glad to help!

[@pheescale]

Amazing!

[@Anna-yq9ux]

THANK YOU! It helps so much :)

[@Edspira]

No problem!

[@randomrandom316]

So if Project 2 has an Incremental IRR over Project 1 greater than the cost of capital(same for both projects), will it always have a positive NPV as long as IRR for Project 1 is also greater than cost of capital?

[@mikejiang7335]

Excellent explaination

[@Edspira]

Thanks!

[@yudistiraputra2232]

This Video is very helpfull, Thx

[@Edspira]

I'm glad you found it useful! Best wishes

[@eileenqiu435]

no kidding you are my life saver =)

[@Edspira]

Happy to help!

[@kannanp4896]

How to calculate the 29% by hand?

[@jrc-jdscampos1659]

I learned a lot. Thank u sir.

[@Edspira]

No problem. Best Wishes!

[@harmannd7270]

how did you find the 38% and 31% by hand, i need to know this plz thx

[@mikejiang7335]

You can only do it by trial and error. just set the NPV to 0 and try different values for IRR

[@ahmedtamermohamed]

Will you please make a video for the APV

[@BryAn-zy8xs]

Clear statements, spot on video

[@hongxuanlee7860]

thank you very much for teaching

[@nacolcs81]

But how do you calculate it without using the calculator on excel

[@azmeenakhan8408]

fantastic

[@5281Fsc]

OMG big thanks to this video.

[@Edspira]

Thanks. Best of luck to you in your studies!

[@twainantony1736]

thank you, have learned alot

[@ekwopi1442]

I’m sorry but I don’t understand. I don’t know how you got the 38 and 31%. I’m lost so I’m gone

[@pyropeps]

IRR is the value (rate) such that NPV = 0, so you can only get it thanks to trial and error. So he just used the excel formula that does the trial and error for us, and then he rounded up the numbers for simplicity purposes

[@ehitkarim1913]

God bless you

[@anirudhsharma6152]

sir what if time periods are different

[@MikeB-gg8jh]

Lol. doesn't help at all unless you're using the excel function

[@Clifffffffffford]

👍