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IRR

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › IRR

  • This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.
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  • September 26, 2014 at 12:03 pm #196501
    student07
    Member
    • Topics: 193
    • Replies: 162
    • ☆☆☆

    Sir could u pls explain me while calculating IRR can we assume any rate as lower n higher or how do we estimate . Or will the answer b same whatever rate we assume. Thanks

    September 26, 2014 at 2:09 pm #196512
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54832
    • ☆☆☆☆☆

    You can use any two interest rates to calculate the IRR.

    Using different rates will give slightly different answers because the relationship is not linear. However, this is not a problem in the exam (and nor is it a problem in real life – we only need an approximate value, not a precise value).

    Have you watched the lectures on this (for F2 and F9, as well as for P4)?

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