March 2025 ACCA Exam Results

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

How to choose Lower rate and Higher Rate for IRR

This topic has 2 replies, 3 voices, and was last updated 9 years ago by Elnur.

Viewing 3 posts - 1 through 3 (of 3 total)

Author
Posts
June 1, 2015 at 5:31 pm #251478
darlene82328
Member
- Topics: 3
- Replies: 6
Hi
Does anyone know in question relating to WACC, when you calculate cost of debt, what determines the lower r and higher r you use?
Thanks
June 1, 2015 at 5:46 pm #251521
John Moffat
Keymaster
- Topics: 57
- Replies: 54648
Nothing determines it. Any two sensible guesses are OK (even though different guesses obviously give slightly different answers due to the fact that the relationship is not linear).
You should watch the free lecture on this!
June 1, 2015 at 8:37 pm #251667
Elnur
Member
- Topics: 2
- Replies: 7
Calculate second NPV using a different rate
If first NPV is positive, use second rate
greater than first rate
If first NPV is negative, use second rate
less than first rate
Author
Posts

Viewing 3 posts - 1 through 3 (of 3 total)

You must be logged in to reply to this topic.