ACCA P4 The Cost of Capital (part 3)

Comments

1. mboyadzhieva says

   October 2, 2017 at 2:45 pm

   Hello and many thanks for the great lectures!

   Could you please explain why any two guesses would work for calculating the IRR? I guess that would be true if at least one gives NPV pretty close to zero or am I wrong?

   Thank you

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2. annette says

   June 22, 2015 at 5:04 pm

   John….please ignore my query because the notes actually have the correct figures, I was following the lectures and practicing examples without checking the answers at the back.

   Ps: The answer to example 10 has the same figures as I got so panic over – phew!

   Apologies but you might want to check the lecture – The Cost of Capital (part 3), example 10.

   Many thanks once again.

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   • John Moffat says

     June 22, 2015 at 5:19 pm

     You are correct – I do apologise. I have been meaning to correct the lecture but I keep forgetting 🙁

     Thanks for reminding me 🙂

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     • accastudentofoman says

       December 8, 2016 at 1:01 pm

       A gentle reminder to correct the mistake.

       The annuity factor for 6 years at 5% Discount rate is 5.076 and not 4.917 which is annuity factor at 6%.

       Thanks for teaching about the short cut to IRR formula. Instead of just blindly applying the quite ‘messy’ formula I really understand deeply how I arrive at the figures.

     • accastudentofoman says

       December 8, 2016 at 1:53 pm

       My apologies. The error IS rectified in a separate lecture: https://opentuition.com/acca/p4/cost-of-capital-example-10/

       Please ignore my comment on the error and accept my gratefulness for the logical way of finding IRR.

     • John Moffat says

       December 8, 2016 at 2:31 pm

       Thanks 🙂