Contents of the Book

1  Introduction

1.1   Internal Rate of Return

1.2   Limitations of IRR and NPV   

1.3   TrueIRR Method        

 

2  Cumulative future value

2.1   Introduction       

2.2   Future Value (at Kth Period)    

2.3   Cumulative Future Value (at Kth Period)          

2.4   Net Future Value                    

2.5   Relationship between CFV, NFV and IRR      

2.6   Lending Value and Borrowing Value   

 

3  Classification of Cash flow Series

3.1   Introduction                   

3.2   Lending Series               

3.3   Borrowing Series                    

3.4   Combination Series        

3.5   Combination Series (Lending) 

3.6    Combination series (Borrowing)         

3.7    Steps to identify the type of Series      

 

4  Combination series and IRR

4.1   Interpretation of IRR of Combination Series    

4.2   Implicit Assumption     

4.3   Need for new Approach         

4.4   New Approach to Combination Series  

5  TrueIRR and Combination Series

5.1   Introduction    

5.2   TrueIRR of Combination Series

5.3   TrueIRR of Combination Series (Lending)                   

5.4   TrueIRR of Combination Series (Borrowing)

5.5   Bifurcation of Combination Series        

 

6  Margin Value

6.1   Introduction

6.2   IRR and Margin Value

6.3   Relationship between IRR and NPV

6.4   Lending series and Margin value          

6.5   Borrowing Series and Margin Value

6.6   Combination Series and Margin Value

 

7  Applications of TrueIRR

7.1   Introduction

7.2   Combination Series

7.3   Comparison of Proposals        

7.4   Incremental Cash flow - Combination Series

 

8  Reinvestment Assumption and MIRR

8.1   Reinvestment Assumption in IRR and NPV

8.2   Modified Internal Rate of Return (MIRR)

8.3    Arguments made in favour of MIRR

8.4 Reinvestment Assumption in IRR and NPV is a myth

8.5 Comparison of Algebraic Formula of MIRR with that of IRR

8.6  Myths about MIRR

 

9  Combination series and NPV

9.1  NPV and types of Series          

9.2  New Approach

9.3 Application of TrueNPV method          

 

10  Typical series

10.1   Series with Multiple IRRs

10.2   Pump Proposal of Lorie and Savage

10.3   Cash flow Series without IRR

10.4   Negative IRR

10.5   Sign Reversals in Cash flow

 

11  Algebraic proofs

11.1   NFV and NPV - Relationship           

11.2   NFV and IRR - Relationship 

11.3   NFV and CFV - Relationship           

11.4    Margin Value and NPV                   

11.5   Descartes’ rule of signs and IRR        

11.6   Lending Series and Descartes’ Rule of Signs

11.7   Borrowing Series and Descartes’ Rule of Signs

11.8   Combination Series and Descartes’ Rule of Signs

11.9  Combination Series with Multiple IRRs and descartes’ Rule of Signs   

11.10 No IRR Cases          

11.11 Comparison of Algebraic Formula of MIRR with IRR