PED guidebook main sxn rev6. FINAL.pdf - LGRC DILG 10

Project Evaluation and DevelopmentExample (f) using Microsoft Excel:The computation of the IRR is quite involved and requires a combination of interpolationtechniques and trial-and-error. Fortunately, this function is found in Microsoft Excel sothe computation is now easy.Consider the above example. We can lay out the data on costs and benefits accruing toeach year. We then compute for the undiscounted net benefits (benefits less cost).Year Costs BenefitsBenefits lessCost0 150,000.00 (150,000.00)1 -2 100,000.00 100,000.003 100,000.00 100,000.004 100,000.00 100,000.005 100,000.00 100,000.00IRR =The procedure IRR is found in Microsoft Excel under the Main Menu “Insert”, submenu“function”.RGEdillon January 200610