• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

March 2026 ACCA Exams

Comments & Instant poll

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2026 exams.
Get your discount code >>

Internal Rate of Return

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Internal Rate of Return

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • January 2, 2022 at 4:47 pm #645199
    sarbrina
    Participant
    • Topics: 57
    • Replies: 78
    • ☆☆

    Hi Mr. John
    I find this question quite tricky. I understand the definition of IRR is the rate at which NPV is zero and I understand the calculation in this question but I do not arrive at zero if you know what I mean. Please be kind enough and explain this question to me detail.

    A machine has an investment cost of $60,000 at time 0. The present values (at time 0) of the expected net cash inflows from the machine over its useful life are:

    Discount rate Present value of cash inflows
    10% $64,600
    15% $58,200
    20% $52,100

    What is the internal rate of return (IRR) of the machine investment?

    A Below 10%
    B Between 10% and 15%
    C Between 15% and 20%
    D Over 20%

    January 3, 2022 at 8:20 am #645211
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    The NPV at 10% is +$4,600, at 15% is – $1,800 (and at 20% is – $7,900, but this is irrelevant),

    For an NPV of zero the IRR must therefore be somewhere between 10% and 15%.

    Have you watched my free lectures on this?

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Kaplan ACCA Free Trial

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE Exams – Instant Poll

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • chrisoleary94 on Changes in group structure – examples – ACCA SBR lectures
  • luyuecui on Statement of cash flows – Example 1 (revision) – ACCA Financial Reporting (FR)
  • Abdinur on Statement of Cash Flows (part b) Example 1 – ACCA Financial Accounting (FA) lectures
  • John Moffat on The valuation of mergers and acquisitions (part 2) – ACCA (AFM) lectures
  • John Moffat on Risk and Uncertainty – Decision Trees Part 2 – ACCA Performance Management (PM)

Copyright © 2026 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in