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 IRR
Take 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.