The NPV And IRR Analysis: Incremental Value

10. The NPV and IRR Analysis After completing the analysis of the project’s expected ROE and found out that the addition of other products could be costly, we decided to look at the two product’s Incremental Value. In order to do so, we used a WACC (discount rate) of 25.10%. This refers to the current value of a projected future cash flow. Nonetheless, in computing this, what we did was take the present value of inflows and subtract the initial cash outflow to be able to predict what the NPV would be. Correspondingly, the NPV is shown below. Net Present Value Analysis While computing for the IV, it was shown that after five years, the negative cash outflows still outweighs the Incremental Value shown. Particularly speaking, the total NPV after five years running is the -$383,499....