IRR using interplotation

LA2018
LA2018 Registered Posts: 19
in Management Accounting: Costing
Hey!
Can anyone help with the attached? I’m confused with IRR anyway but this question I’m not sure where to start as the second pic has the figures given to me? Also I’m confused with which one causes zero NPV .

Answers

  • ncacat
    ncacat Registered Posts: 44
    Could you attach the pictures again?
  • LA2018
    LA2018 Registered Posts: 19
    edited July 2019
    Ah sorry I thought I had! For some reason it won’t let me upload the pic it’s saying I can’t .The question said “ NPV calculates -450 using discount rate of 8%. What is the approx IRR of the project”. I think I get it now I think it’s not asking me to do any calculations it’s just making sure I understand the % needs to be more then the capital to make a profit?
  • LA2018
    LA2018 Registered Posts: 19
    @nacat
  • LA2018
    LA2018 Registered Posts: 19
    @nacat
  • LA2018
    LA2018 Registered Posts: 19
    @nacat
  • LA2018
    LA2018 Registered Posts: 19
    :/
  • KerryL
    KerryL Registered Posts: 1
    I am doing question 10.10 in the ‘Analysing costs and revenues’ book but am confused as my answer is correct at 22% but the answer also says ‘ in conclusion IRR is approx 20%’ ? Can someone explain why this is. Would the correct answer in an exam be 22% as the calculation worked out or 20%?

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