I don’t really understand what you are asking, because we do neither. We discount using two interest rates (and look up the discount factors in the tables) and then approximate between the NPV’s to get the IRR.

Hi Professor, Thank you very much for your valuable lectures. These IRR calculations and NPV calculations can be done through the calculator. (BA 2 Plus) Is it okay to use the calculator method or is it mandatory to use the table method?

That calculator is not allowed in the exam – it displays letters as well as numbers and you are not allowed calculators that have letters in the display.

Anyway, appreciate that most of the questions in the exam are designed in a way to test that you understand what you are doing – not just that you can do simple calculations 🙂

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nethraram says

it was very helpful sir. to find the discounting factor in IRR, do we divide initial investmnet / cash flow or the other way round?

John Moffat says

I don’t really understand what you are asking, because we do neither. We discount using two interest rates (and look up the discount factors in the tables) and then approximate between the NPV’s to get the IRR.

sachini1995 says

Hi Professor,

Thank you very much for your valuable lectures. These IRR calculations and NPV calculations can be done through the calculator. (BA 2 Plus) Is it okay to use the calculator method or is it mandatory to use the table method?

John Moffat says

That calculator is not allowed in the exam – it displays letters as well as numbers and you are not allowed calculators that have letters in the display.

Anyway, appreciate that most of the questions in the exam are designed in a way to test that you understand what you are doing – not just that you can do simple calculations 🙂

faith20ul19 says

Thank you John for this presentation. The approach regarding the IRR was put straight.

John Moffat says

Thank you for your comment 🙂