MyCIMA

F3 September 2010 Question 3

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Keywords: F3

Hi,

Anyone please help to solve my problem regarding the above mention question how can i get 18% of DF for calculation of IRR??  

Understand

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IRR

This is taken by the examiner to come u at negative npv  of 1.44 but you can take anyother Df of your choice like 20% . Usually a discount factor that shows the minimum value is  taken , if you use 20 % then the gap created would become very high so feasible is to use 18 %