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?

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.

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.

mboyadzhieva says

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

annette says

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.

John Moffat says

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

Thanks for reminding me 馃檪

accastudentofoman says

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

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

Thanks 馃檪