Posted 07 May 2013 - 04:27 AM
Posted 31 May 2013 - 09:42 AM
The internal rate of return is also computed as follows: Investment/Cash Flows = Present Value Factor
The higher the present value factor, the lower the computed rate (internal rate of return). Decreasing tax credit on the asset will increase the investment. Increase in investment will increase present value factor, hence will decrease IRR.