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IRR

This topic has 2 replies, 2 voices, and was last updated 5 years ago by John Moffat.

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May 31, 2019 at 5:08 pm #518091
alikhakar
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In exam suppose we calculate NPV @10% cost of capital and dNPV is +5000 and then we calculate @12% and NPV is +700 ..can we take these two value to calculate IRR ?
OR IS IT COMPULSORY TO TAKE ONE +VE AND ONE -VE VALUE ? i read in one solution of BPP kit that linear interpolation gives more accurate value then linear exptrapolation ..but i didnt understand what that means.
Thanks
May 31, 2019 at 5:37 pm #518095
alikhakar
Participant
- Topics: 187
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Also i have practiced from bpp kit of 2016-17 edition.. Is that ok ? Or the syllabus was changed ?
May 31, 2019 at 8:23 pm #518116
John Moffat
Keymaster
- Topics: 57
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Having one negative and one positive NPV does give a better approximation, but for the exam that does not matter – by all means calculate it if you have two positive values.
Again, I explain this in my lectures!!!
The syllabus has not changed.
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