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Hello everyone i need a little hand with this as it’s torturing me!!!
NPV = 0 = -5+(100+(350-100)*80%*5%) + ((350-100)/1+IRR)*20% = 28.2%
I really don’t understand how my tutor got this result but apparently it’s the correct one.
I, for the love of God, cannot get this in any shape or form. Hopefully somebody with a bit of a math clue has a way to get this result? I’d appreciate your help. ThanksWithout seeing the question, it does seem a strange way for your tutor to go about getting the IRR (even though the final answer is correct).
I do not know which exams you are taking, but for every syllabus I am aware of all that matters is getting the correct IRR (what method you use is irrelevant).Can I suggest that you look at the lectures on IRR on the ACCA section of this website?
The method used there is much simpler (and makes more sense, which is just as important 🙂 )
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