Incremental IRR is a way to analyze the financial return when there are two competing investment opportunities involving different amounts of initial investment.
In this post we will explore how to calculate incremental IRR and how it helps in deciding between two projects with different investment.
Let’s consider a project with following cash flow stream:
Assume 10% discount rate.
The project IRR is 13.27% and the NPV is 128.5.
Now let’s consider another project with following cash … Read more