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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › GNT CO PILOT 12

- This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.

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- September 3, 2018 at 3:39 pm #470981
i have seen other post that the way to get 4.2%is by

The NPV at 5% is 1043.27 – 1079.68 = -36.41

The NPV at 4% is 1089.01 – 1078.68 = +10.33

Therefore the IRR = 4% + 10.33/(10.33 + 36.41) = 4.02%

(Got from https://opentuition.com/topic/gnt-co/)

1. how did you get 1078.68 ? because this is not shown anywhere in the question or in the answer

2. also shouldn’t the IRR be 4.22% ?

4% + 10.33/ ( 10.33 + 36.41 ) x (5%-4%)

September 3, 2018 at 5:29 pm #471053Oops – I made a trivial typing error (it happens when I am answering so many questions).

However – assuming you are happy with basic IRR calculations (which you should be since it was the same in Papers F2 and Paper PM) then my error should be pretty obvious 🙂

It should read as follows:

The NPV at 5% is 1043.27 – 1079.68 = -36.41

The NPV at 4% is 1089.01 – 1079.68 = +9.33

Therefore the IRR = 4% + 9.33/(9.33 + 36.41) = 4.2%

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