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# IRR calculations and NPV

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Make a spreadsheet document that contains the IRR calculations.

Clearly label each diagram to identify the investment name and type of asset
Show the original equation you are using
Clearly identify a value for each variable in the equation

Then, in a Microsoft Word document, prepare a summary report (300 words or less) that includes the following:

The NPVs of the four potential investments, ranked from most profitable to least profitable. I have the NPV's done ...please see excel spreadsheet.

The IRRs of the four potential investments, ranked from most profitable to least profitable
Your recommendation for the single most profitable investment and a justification of that choice

#### Solution Preview

BLUE MESA SUMMARY REPORT

The four projects Sagebrush, Longhorn, Big Crick and Dusty Basin are ranked based on NPV as below:
Rank 1: Big Crick-NPV=\$125 million
Rank2: Longhorn-NPV=\$51.88 million
Rank3: Sagebrush - NPV=\$26.63 million
Rank 4: Dusty Basin - NPV=\$20.34 million
The higher the value of the NPV the better the project is.

The ranking of the four projects based on IRR is as below:
Rank 1: Longhorn - IRR=22.15%
Rank2: Big Crick ...

#### Solution Summary

IRR calculations and NPV are examined.

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