Chapter 3. Project profitableness measures

Various modifications of the internal rate of return are discussed, which can be used in profitable projects with multiple IRRs. It is shown that in many cases they exist in the form of a pair of indicators connected by a certain equation. If one of these indicators has the property of NPV-compatibility. The presence of such properties makes it possible to use indicators to evaluate the profitableness of borrowing projects from the positions of the investor and the recipient, respectively. Classes of static and dynamic indicators of profitability are allocated. In dynamic indicators, the internal logic of the project is used, based on the calculation of the current loan indebtedness of participants, while static indicators are constructed by deforming the standard equation for finding IRR on the basis of certain speculative considerations. At the same time, dynamic profitableness indicators can be considered as generalizations of the concept of IRR, and static ones are just IRR-like, which, in fact, have no relation to IRR as an internal measure of profitability of borrowing projects. The comparative analysis of static and dynamic indicators of profitability is given for the example of the project with three simple IRR values. The possibility of constructing the investment project profitableness indicator by aggregating the pair (NPV-compatible and counter NPV-compatible) indices of the corresponding borrowing project is considered.