When and How to Use NPV, IRR, and Modified IRR

The Economic Evaluation Notes are arranged in three groups. The first group (TRN-6 to TRN-10) provides criteria for selection a particular evaluation technique or approach; the second (TRN-11 to TRN-17) addresses the selection of values of various...

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Main Authors:	Mackie, Peter, Nellthorp, John, Laird, James
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	BASE YEAR BRIDGES CASH FLOWS COST BENEFIT ANALYSIS COST OF CAPITAL CYCLISTS DISCOUNT RATE ECONOMIC EVALUATION ECONOMIC RATE OF RETURN FRAMEWORK FUTURE VALUE INTERCHANGES INTEREST RATE INTERNAL RATE OF RETURN INVESTMENT OPERATIONS INVESTMENT PROJECTS LIGHT RAIL MAINTENANCE ACTIVITIES MARKET INTEREST RATE NET BENEFITS NET PRESENT VALUE NPV OPERATING COSTS OPPORTUNITY COST PEDESTRIANS PORTS PRESENT VALUE PUBLIC INVESTMENTS PUBLIC TRANSPORT REGULATORY REFORM ROAD INFRASTRUCTURE ROAD MAINTENANCE ROUTES SAFETY SAVINGS TAX REFORM TRAFFIC TRAFFIC MANAGEMENT TRANSPORT TRANSPORT ECONOMICS TRANSPORT PROJECTS TRAVEL TIME TUNNELS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBAN TRANSPORT VEHICLE OPERATING COSTS
Online Access:	http://documents.worldbank.org/curated/en/2005/01/6371290/notes-economic-evaluaiton-transport-projects-use-npv-irr-modified-irr-notes-economic-evaluation-transport-projects-use-npv-irr-modified-irr http://hdl.handle.net/10986/11792

id	okr-10986-11792
recordtype	oai_dc
spelling	okr-10986-117922021-04-23T14:02:57Z When and How to Use NPV, IRR, and Modified IRR Mackie, Peter Nellthorp, John Laird, James BASE YEAR BRIDGES CASH FLOWS COST BENEFIT ANALYSIS COST OF CAPITAL CYCLISTS DISCOUNT RATE ECONOMIC EVALUATION ECONOMIC RATE OF RETURN FRAMEWORK FUTURE VALUE INTERCHANGES INTEREST RATE INTERNAL RATE OF RETURN INVESTMENT OPERATIONS INVESTMENT PROJECTS LIGHT RAIL MAINTENANCE ACTIVITIES MARKET INTEREST RATE NET BENEFITS NET PRESENT VALUE NPV OPERATING COSTS OPPORTUNITY COST PEDESTRIANS PORTS PRESENT VALUE PUBLIC INVESTMENTS PUBLIC TRANSPORT REGULATORY REFORM ROAD INFRASTRUCTURE ROAD MAINTENANCE ROUTES SAFETY SAVINGS TAX REFORM TRAFFIC TRAFFIC MANAGEMENT TRANSPORT TRANSPORT ECONOMICS TRANSPORT PROJECTS TRAVEL TIME TUNNELS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBAN TRANSPORT VEHICLE OPERATING COSTS The Economic Evaluation Notes are arranged in three groups. The first group (TRN-6 to TRN-10) provides criteria for selection a particular evaluation technique or approach; the second (TRN-11 to TRN-17) addresses the selection of values of various inputs to the evaluation, and the third (TRN-18 to TRN-26) deals with specific problematic issues in economic evaluation. The Notes are preceded by a Framework (TRN-5), that provides the context within which we use economic evaluation in the transport sector. All three NPV, IRR, and modified IRR are summary measures of project performance. Each one provides a single figure summarizing the impact of the project on economic welfare. Each of the three measures does, however, give subtly different information: 1) NPV focuses on the total welfare gain over the whole life of the project; and, 2) IRR and Modified IRR focus on the rate at which benefits are realized following an initial transport investment. 2012-08-13T16:02:23Z 2012-08-13T16:02:23Z 2005-01 http://documents.worldbank.org/curated/en/2005/01/6371290/notes-economic-evaluaiton-transport-projects-use-npv-irr-modified-irr-notes-economic-evaluation-transport-projects-use-npv-irr-modified-irr http://hdl.handle.net/10986/11792 English Transport Notes Series; No. TRN 6 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BASE YEAR BRIDGES CASH FLOWS COST BENEFIT ANALYSIS COST OF CAPITAL CYCLISTS DISCOUNT RATE ECONOMIC EVALUATION ECONOMIC RATE OF RETURN FRAMEWORK FUTURE VALUE INTERCHANGES INTEREST RATE INTERNAL RATE OF RETURN INVESTMENT OPERATIONS INVESTMENT PROJECTS LIGHT RAIL MAINTENANCE ACTIVITIES MARKET INTEREST RATE NET BENEFITS NET PRESENT VALUE NPV OPERATING COSTS OPPORTUNITY COST PEDESTRIANS PORTS PRESENT VALUE PUBLIC INVESTMENTS PUBLIC TRANSPORT REGULATORY REFORM ROAD INFRASTRUCTURE ROAD MAINTENANCE ROUTES SAFETY SAVINGS TAX REFORM TRAFFIC TRAFFIC MANAGEMENT TRANSPORT TRANSPORT ECONOMICS TRANSPORT PROJECTS TRAVEL TIME TUNNELS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBAN TRANSPORT VEHICLE OPERATING COSTS
spellingShingle	BASE YEAR BRIDGES CASH FLOWS COST BENEFIT ANALYSIS COST OF CAPITAL CYCLISTS DISCOUNT RATE ECONOMIC EVALUATION ECONOMIC RATE OF RETURN FRAMEWORK FUTURE VALUE INTERCHANGES INTEREST RATE INTERNAL RATE OF RETURN INVESTMENT OPERATIONS INVESTMENT PROJECTS LIGHT RAIL MAINTENANCE ACTIVITIES MARKET INTEREST RATE NET BENEFITS NET PRESENT VALUE NPV OPERATING COSTS OPPORTUNITY COST PEDESTRIANS PORTS PRESENT VALUE PUBLIC INVESTMENTS PUBLIC TRANSPORT REGULATORY REFORM ROAD INFRASTRUCTURE ROAD MAINTENANCE ROUTES SAFETY SAVINGS TAX REFORM TRAFFIC TRAFFIC MANAGEMENT TRANSPORT TRANSPORT ECONOMICS TRANSPORT PROJECTS TRAVEL TIME TUNNELS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBAN TRANSPORT VEHICLE OPERATING COSTS Mackie, Peter Nellthorp, John Laird, James When and How to Use NPV, IRR, and Modified IRR
relation	Transport Notes Series; No. TRN 6
description	The Economic Evaluation Notes are arranged in three groups. The first group (TRN-6 to TRN-10) provides criteria for selection a particular evaluation technique or approach; the second (TRN-11 to TRN-17) addresses the selection of values of various inputs to the evaluation, and the third (TRN-18 to TRN-26) deals with specific problematic issues in economic evaluation. The Notes are preceded by a Framework (TRN-5), that provides the context within which we use economic evaluation in the transport sector. All three NPV, IRR, and modified IRR are summary measures of project performance. Each one provides a single figure summarizing the impact of the project on economic welfare. Each of the three measures does, however, give subtly different information: 1) NPV focuses on the total welfare gain over the whole life of the project; and, 2) IRR and Modified IRR focus on the rate at which benefits are realized following an initial transport investment.
format	Publications & Research :: Brief
author	Mackie, Peter Nellthorp, John Laird, James
author_facet	Mackie, Peter Nellthorp, John Laird, James
author_sort	Mackie, Peter
title	When and How to Use NPV, IRR, and Modified IRR
title_short	When and How to Use NPV, IRR, and Modified IRR
title_full	When and How to Use NPV, IRR, and Modified IRR
title_fullStr	When and How to Use NPV, IRR, and Modified IRR
title_full_unstemmed	When and How to Use NPV, IRR, and Modified IRR
title_sort	when and how to use npv, irr, and modified irr
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/01/6371290/notes-economic-evaluaiton-transport-projects-use-npv-irr-modified-irr-notes-economic-evaluation-transport-projects-use-npv-irr-modified-irr http://hdl.handle.net/10986/11792
_version_	1764418012272656384

When and How to Use NPV, IRR, and Modified IRR

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