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Using the trial and error Method, outline the Steps in the calculation of IRR

      

Using the trial and error Method, outline the Steps in the calculation of IRR

  

Answers


Ruth
Steps in the IRR trial and error calculation method
(i) Compute the NPV of the project using an arbitrary selected discount rate
(ii) If the NPV so computed is positive then try a higher rate and if negative try a lower rate.
(iii) Continue this process until the NPV of the project is equal to zero
(iv) Use linear interpolation to determine the exact rate

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NatalieR answered the question on February 9, 2022 at 11:52


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