How to calculatge internal rate of return? give examples.?

Question

How to calculatge internal rate of return? give examples.?

Answer 1

Here is the formula to calculate IRR e.g. EMI on consumer loan.

Open excel. on the top cell in a row write loan amount. thereafter fill up every cell below with EMI figure with minus sign since it is a outgo. In the top figure deduct all processing charges, documentation, advance EMI etc.

Now come to the end of the row where the last EMI is mentioned.

In the next row cell give the formula IRR(beginning cell..last cell, 0.05)

Give return and you will get the IRR. convert the cell to percentage or multiply by twelve as the case may be.

Hope this helps.

Answer 2

Visit the site below to gey definate answers

1)www.accaglobal.com/students/publicat...

2)

www.accaglobal.com/students/publicatio...

3)

www.accaglobal.com/students/study_exam...

Answer 3

IRR is defined as the rate at which when you discount the future cash flows, the NPV is zero....

If you have a financial calculator,

enter future cash flows in the cash flow register......

press 'cpt' IRR.....

Calculating it manually is a long process....

You have to equate the discounted future cash flows to zero to calculate IRR...

Hope it helps....