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Effect of inflation on payback and IRR

This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.

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September 4, 2020 at 3:16 am #583315
amyakku
Participant
- Topics: 13
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Hai sir,
A project has outflows for d first 2 years and series of inflows for the next 3 years. Project gives a positive NPV without considering the inflation. What will be the effect of considering inflation on payback and IRR?
September 4, 2020 at 10:08 am #583376
John Moffat
Keymaster
- Topics: 57
- Replies: 54835
Why are you attempting questions for which you do not have an answer?
This could not possibly be asked in Paper AFM.
The payback period will reduce and the IRR will increase.
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