This financial analysis will generate values for the following standard viability indicators.
• Financial Internal Rate of Return
• Internal Rate of Return on Equity
• Net Present Value on Project
• Net Present Value on Equity, after financing
• Payback Period, after tax
The FIRR and NPV on project are preliminary measures of the financial feasibility of the overall project. The WACC is a benchmark used to compare the profitability of the proposed investment against the weighted cost of project financing.
The IRR on Equity and the NPV on Equity measure project profitability based on the proponents' equity, financing sources and cost. The FIRR and the IRRe should be higher than the WACC in order for the project to be considered feasible. The payback period after financial charges and after tax helps the LGU and the proponent determine whether any tax or other incentives are required.