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Hi, in the videos you say on a few occasions that in the exam we should round IRR to nearest %. for project appraisal.
If eg IRR=12.28%
To me it would make sense to round to 13% rather than 12%, because using 12% could lead to a -ve outcome.
So should we round to the nearest, or she we round up to the nearest?
Thanks
It is not really relevant in the exam, partly because reasonable rounding doesn’t lose any marks, and also because it is unlikely to have any effect on the overall WACC (because debt borrowing is only a relatively small part of the calculation).
Also, in Section C of the exam (where any full calculations of the WACC would be), it makes sense to use the spreadsheet functions anyway in which case rounding is less relevant.
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