12 January 2014
Simply stated IRR is the rate at which the Present Value of the stream of Cash inflows equals the Present Value of the stream of cash outflows. Projects whose IRR is greater than cost of capital are acceptable.
Strictly speaking there is no fixed formula for calculation of IRR. We find a formula suggested by certain authors at some places but it does not hold good in all scenarios.
If it is calculated manually, Hit and Trial method is the right method.
In case you are using a spread sheet, then you can apply the spreadsheet formula for calculation of IRR directly.
Strictly speaking there is no fixed formula for calculation of IRR. We find a formula suggested by certain authors at some places but it does not hold good in all scenarios.
If it is calculated manually, Hit and Trial method is the right method.
In case you are using a spread sheet, then you can apply the spreadsheet formula for calculation of IRR directly.
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