[Boards: 3 / a / aco / adv / an / asp / b / biz / c / cgl / ck / cm / co / d / diy / e / fa / fit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mu / n / news / o / out / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / t / tg / toy / trash / trv / tv / u / v / vg / vip /vp / vr / w / wg / wsg / wsr / x / y ] [Search | Home]
I posted this on /adv/ but I'm hoping...
If images are not shown try to refresh the page. If you like this website, please disable any AdBlock software!

File: 1437261837410.jpg (944 KB, 1345x1450) Image search: [iqdb] [SauceNao] [Google]
944 KB, 1345x1450
I posted this on /adv/ but I'm hoping you guys will have the answer

I have an accounting exam tomorrow and I cannot wrap my head around IRR. The internet tells me one thing, my fucking stupid lecturer tells me another

Now I do not have the slightest clue as to how to work this out, some help would be great:

In a calculation of the internal rate of return (IRR) of a project it is found that the net present value is +£140m at 20% discount rate and -£84m at 22% discount rate. What is the IRR?

a) 20.38%
b) 20.63%
c) 20.75%
d) 21.25%

what is the formula to solve this?? clueless right here

Also, is there anyway to quickly get to the IRR? I really don't think calculating the NPV for different discount rates through trial and error is the most efficient way. We're only allowed a standard casio scientific calculator too, so no financial calculator
>>
Disclaimer: I'm only a MathsFag and have not a fucking clue about finance or what IRR is.

Now, assuming we're looking for a value between 20% and 22% discount rate to give £0, I did:

(£140/(£140--£84) * 2% + 20% = 21.25%.

It's simple rations, senpai....
>>
>>1062046
thank you man, sometimes it's simple calculations like that that does it, think I've just overcomplicated it for myself