Question
What is the Internal Rate of Return for a project with a 12% WACC?
Answers
GPT-4o mini
The Internal Rate of Return (IRR) is the discount rate at which the net present value (NPV) of a project is zero. It is a measure of the profitability of an investment. The Weighted Average Cost of Capital (WACC) is used as a benchmark for evaluating whether to proceed with a project; if the IRR exceeds the WACC, the project is generally considered acceptable.
However, the IRR cannot be directly determined simply from knowing the WACC, which is 12% in your case. To find the IRR, you would need specific information about the cash flows associated with the project.
Typically, you would:
1. List the projected cash flows from the project over its life.
2. Use those cash flows to calculate the IRR using financial calculators or software that support the IRR function (such as Excel).
If you provide me with the specific cash flows of the project, I can help you calculate the IRR.
However, the IRR cannot be directly determined simply from knowing the WACC, which is 12% in your case. To find the IRR, you would need specific information about the cash flows associated with the project.
Typically, you would:
1. List the projected cash flows from the project over its life.
2. Use those cash flows to calculate the IRR using financial calculators or software that support the IRR function (such as Excel).
If you provide me with the specific cash flows of the project, I can help you calculate the IRR.