What is Incremental IRR?

Incremental IRR is a way to analyze the financial return when there are two competing investment opportunities involving different amounts of initial investment. In this post we will explore how to calculate incremental IRR and how it helps in deciding...

The Curious Case of Negative IRR

Negative IRR indicates that the sum of post-investment cash flows is less than the initial investment; i.e. the non-discounted cash flows add up to a value which is less than the investment. So yes, both in theory and practice negative...

Shareholder Loan and Equity IRR

Many a time I'm requested to explain the relation between shareholder loan and the equity IRR. Should shareholder loan be part of equity IRR calculation? And if there are more than one equity investor, what should we do! Shareholder loan...