Corporate Finance: Instructor\'s Manual Applied Corporate Finance

Aswath Damodaran 251

An Equity IRR

Figure 5.6: NPV Profile on Equity Investment in Paper Plant: Aracruz

($50,000.00)

$0.00

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

$300,000.00

$350,000.00

0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%9.00%10.00%11.00%12.00%13.00%14.00%15.00%16.00%17.00%18.00%19.00%20.00%

Discount Rate

NPV

The IRR for this project, using real equity cashflows, is 18.39%, higher than the

cost of equity of 11.46%....