3. The Basics of Capital Budgeting: IRR A project's internal rate of return (IRR) is...

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image 3. The Basics of Capital Budgeting: IRR A project's internal rate of return (IRR) is the that forces the PV of its inflows to equal its cost. The IRR is an estimate of the project's rate of return, and it is comparable to the on a bond. The equation for calculating the IRR is: NPV=CF0+(1+IRR)1CF1+(1+IRR)2CF2++(1+IRR)NCFN=00=t=1N(1+IRR)tCFt equation solved for the particular discount rate that causes NPV to equal -Select- . should be used to evaluate projects. they have risk characteristics similar to the firm's average project. Bellinger's WACC is 9%

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