Chapter 19: Investment decisions:NPV and IRR

Know how to calculate net sale proceeds (NSP), before-tax cash flow (BTCF), before-tax equity reversion (BTER) Know how to calculate the net present value (NPV) and the internal rate of return (IRR) of a levered investment project Know the difference between BTCF and NOI (levered vs unlevered cash flow) Understand how the required internal rate of return (discount rate) affects NPV and IRR in the investment decision Understand how increasing leverage can affect the risk and the return of investment