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Hello sir . Can you please tell me if in a question we are provided two positive NPV
I.e
at discount rate of 5% 69700positive
At discount rate 14% 16000positive
At discount rate 20% 10500negative
How to know which one should be taken in the formula to calculate IRRTake the rate closest to the rate giving the negative NPV. So in this case 15% and 20%.
As I explaining my free lectures, any answer will be only an approximation because of non-linearity, but the close the interest rates used are then the better the approximation will be.
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