PV of a project

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

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November 3, 2020 at 8:45 am #593906
leo10
Member
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Hi Sir,

Please could you help me on this:

A project with CF which are all subject to inflation at a rate of 4%, has an IRR of 15%. What would the IRR be if the CF inflated instead at 6%?

Thank you
November 3, 2020 at 11:08 am #593933
John Moffat
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Why are you attempting a question for which you do not have an answer?

You need to apply the Fisher formula in the same way as we apply it to the cost of capital.
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