What is the difference between firr and eirr

PDF 2. Author Ali, Ifzal. Theme Finance. Users also downloaded. Khan, Ashfaque H. Given its fragile balance of payments position and urgent need to boost industrial production, Pakistan needs to significantly increase its mobilization of foreign resources.

Significant increases However, long-term official assistance will become increasingly scarce, while Introduction of distributed generation DG to the power system may lead to non-selective protection actions.

For every future DG installation, the relay settings need to be modified to guarantee protection coordination t. Read more. August 27, This manual covers all the basic concept regarding micro-hydro design. The FIRR is an indicator to measure the financial return on investment of an income generation project and is used to make the investment decision.

The FIRR is obtained by equating the present value of investment costs as cash out-flows and the present value of net incomes as cash in-flows. The internal rate of return IRR is the annual rate of growth that an investment is expected to generate. But that would be a mistake. The higher the projected IRR on a project, and the greater the amount by which it exceeds the cost of capital, the higher the net cash flows to the company.

A company may choose a larger project with a low IRR because it generates greater cash flows than a small project with a high IRR. NPV discounts each inflow and outflow to the present, and then sums them to see how the value of the inflows compares to the other. A positive NPV means the investment is worthwhile, an NPV of 0 means the inflows equal the outflows, and a negative NPV means the investment is not good for the investor.

In other words, long projects with fluctuating cash flows and additional investments of capital may have multiple distinct IRR values.