Provided by APF
Academy of Professional Finance
CFA Level II
Incremental Cash Flow
We classify incremental cash flows for capital projects as:
(1)initial investment outlay
Solutions to Problems
Note to instructor: In most problems involving the IRR calculation, a financial calculator has been used.
LG 1: Payback period
a. $42,000 $7,000 = 6 years
b. The company should accept the project, since 6 < 8.