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Are we allowed to use IRR function for calculating cost of debt in section C for WACC i.e just writing the cash flows in each year and than simply applying the function.
Won’t be loose mark by not calculating it the usual way i.e using two different cost of capital, calculating the NPV with each and than finally IRRYes, you can use the IRR function in the spreadsheet provided and although you would not lose marks for calculating using 2 ‘guesses’ is makes more sense to use the function because it is so much faster.
Do read the last chapter of our free lecture notes – it contains links to the resources on the ACCA website where you can practice using the functions available.
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