Perhaps a silly question – if you were finding the IRR in practice/doing a sensitivity analysis on interest rate change etc
would you ever find people using the binomial expansion and finding the solution algebraically? Or would it just be a numerical solution that is left to the computer – I imagine Excel etc has something that might be more precise than the 2 interest rates and approximate method (though appreciate that in practice there might be limited benefit to greater precision given all the other uncertainties in forecasting assumptions etc)
Best,
James
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IRR - in practice
You would use the excel function in practice (just as you sensibly would in the exam) simply for the ease and speed :-)
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