# NPV with Only Costs & IRR

 0
Tom Loxton

NPV with Only Costs & IRR

🔥 Hi, I have been posed with the problem of trying to calculate an NPV, with only costs provided and an IRR. Additionally, costs are not incurred upfront, but by borrowing over each period at a given rate. Would it be incorrect to go ahead and use the IRR to estimate what the net cash inflows would be based on the cash outflows? So Cost * (1 + IRR) = estimated cash inflow.
Otherwise any input on techniques is appreciated!

Rating

 1
Management Fan
Analyst, Philippines

NPV Use for Investment Criteria

There should be an incremental cash inflows (future inflows) since you will evaluating the value of such future net cash inflows over pulling the value of each future inflows to the present time hence the formula is FV * (1+r)^(no. of years).
r is the rate used as hurdle rate or cost of capital especially if you can have this rate with an investment elsewhere. NPV should be positive and the IRR should be higher than the rate used. This is incorporating time value of money and capital budgeting.

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 More on Net Present Value (NPV):
 Discussion Topics
 Re-evaluating an investment decision Operating Cash Flows Does the Net Present Value (NPV) calculation uses cash inflows or profits? Choosing between Investments Using a Comparison of NPVs More Complex NPV Comparison: Interrelated Projects NPV of \$1 Million for a Project Means What WHEN to Invest? Investing at the Right Moment... Calculating NPV with Missing Data Example of Net Present Calculation NPV of Partial Payments How do you Calculate NPV when Initial Investments are Unknown? Missed Interest in NPV NPV assumes Certainty of Cash Flows Calculating Cost per Unit if Zero NPV without any Operating Costs Information Calculating NPV for a Project NPV Cost Avoidance and Savings NPV for Leased Equipment versus Purchased Equipment NPV with a Missing Cash Flow Figure 👀 NPV with Only Costs & IRR
 Special Interest Group
 Do you know a lot about Net Present Value (NPV)? Become our SIG Leader