Chapter 7

Valuation Free Cash Flows Katharina Lewellen Finance Theory II ... ¾IRR is the discount rate that makes NPV = 0 0 (1 IRR) C... (1 IRR) C 1 IRR C NPV I T T 2 1 2 ... ¾First, determine the expected cash-flows as if the project were 100% equity financed. ¾Later, we will adjust for financing. ................
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