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what is the IRR

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › what is the IRR

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • March 3, 2017 at 4:10 pm #375328
    Yong
    Participant
    • Topics: 17
    • Replies: 15
    • ☆

    Initial investment 350K

    Incremental cash flow Discounted Cash flow 20% Disc Cash flow 20%
    Year 1 50 0.833 41.65
    Year 2 110 0.694 76.34
    Year 3 130 0.579 75.27
    Year 4 150 0.482 72.3
    Year 5 100 0.402 40.2
    NPV 48 (10%) 41.24

    What is the IRR?
    The answer is 15.4%. (10 + (48/(48+41.24) x 10)

    However, I am not able to get 41.24. (instead I get 44.24), can please assist to explain how 41.24 is derived.

    Thank you.

    March 3, 2017 at 6:55 pm #375351
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54704
    • ☆☆☆☆☆

    I get 44.24 also.

    Either there is a typing error in the answer, or you have copied wrongly (without seeing the actual question I can’t know).

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘what is the IRR’ is closed to new replies.

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