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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › IRR – in practice
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
You would use the excel function in practice (just as you sensibly would in the exam) simply for the ease and speed 🙂