- This topic has 3 replies, 2 voices, and was last updated 11 years ago by
.
Viewing 4 posts - 1 through 4 (of 4 total)
- Posts
Questions where NPVs are negative and positive, its easy to calculate the IRR.
However, what if the 2 NPVs are positive or both are negative then how do we compute the IRR?
regards
You use exactly the same approach.
Here is an example:
Suppose the NPV at 10% is +5,000, and then NPV at 15% is +1,000
Over a change of 5 percents, the NPV falls by 4,000.
So the IRR is 15% + (1000/4000 x 5%) = 16.25%
(or, if you prefer, IRR = 10% + (5000/4000 x 5%) = 16.25%)
Viewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.