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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › Internal rate of return
Dear Sir,
I watched your lecture on the internal rate of return and found it useful, thank you. I wanted to know whether it is likely in the exam that a question to calculate the IRR would be asked? It seems that calculating NPV at two different rates, then doing a third calculation to find the rate in between those two that equals NPV of zero is a lot to do for a two mark question?
My second question is in relation to the practice exams I have been doing. Where the question asks to select, for example, two correct sentences out of a potential four sentences and is worth two marks, is it correct that if you select one correct sentence and one incorrect sentence that you get zero marks? I thought for a two mark question that one mark would be awarded in that scenario.
Thank you
It is very likely that you will be asked to calculate an IRR having calculated the NPV at two different rates.
As you practice our online practice test and our mock exam, and as you work through the questions in your Revision Kit, you will find that despite the fact that all the questions are just two marks, some take longer and others (especially those not involving calculation are a lot quicker. That is why it is so important in the exam to answer all of the ‘quick’ questions first before going back and then spending more time on the longer questions.
There are no 1 marks – you either get it completely right and get 2 marks, or it is not completely right and you get 0 marks. You do not get 1 mark for getting it half right.