MQ Chatter Thread (11 Viewers)

Anthel

Anthel

Active Member
Joined
Sep 4, 2014
Messages
203
Location
Australia
Gender
Male
HSC
N/A
BLIT2014 said:
Which finance unit? I have been told some are fairly tough!
Click to expand...
AFIN102 theres a quiz next week focusing on the first 2 weeks so it shouldnt be a complete nightmare. Everything is fine and dandy Im just stuck on IRR and the NPV concepts, jesus I cant crack my head around it.
 
BenHowe

BenHowe

Active Member
Joined
Aug 20, 2015
Messages
354
Gender
Male
HSC
2016
Uni Grad
2020
doing good but these questions for acst202 you gotta read carefully cause they have dates and day counts... @ when you have a calendar in your formula sheet
 
BenHowe

BenHowe

Active Member
Joined
Aug 20, 2015
Messages
354
Gender
Male
HSC
2016
Uni Grad
2020
Anthel said:
AFIN102 theres a quiz next week focusing on the first 2 weeks so it shouldnt be a complete nightmare. Everything is fine and dandy Im just stuck on IRR and the NPV concepts, jesus I cant crack my head around it.
Click to expand...
IRR and NPV are linked. For example, say project A has Cash Flows of -100 at time 0, 20 at time 1, ... , 20 at time 4 and 50 at time 5. What's the present value of these cash flows?



The value for i which makes the expression above equal to 0 is called the internal rate of return or IRR. It is the minimum return required by a project not to make a loss. So the net present value >= 0 if the rate of return or interest rate is >= the IRR. Make any more sense?
 
Anthel

Anthel

Active Member
Joined
Sep 4, 2014
Messages
203
Location
Australia
Gender
Male
HSC
N/A
BenHowe said:
IRR and NPV are linked. For example, say project A has Cash Flows of -100 at time 0, 20 at time 1, ... , 20 at time 4 and 50 at time 5. What's the present value of these cash flows?



The value for i which makes the expression above equal to 0 is called the internal rate of return or IRR. It is the minimum return required by a project not to make a loss. So the net present value >= 0 if the rate of return or interest rate is >= the IRR. Make any more sense?
Click to expand...
Yeah, that actually does make sense. Thanks dude! If a question does ask you to find IRR is there any way of doing it analytically or do you have to use excel/finan calc?
 
ProdigyInspired

ProdigyInspired

Tafe Advocate
Joined
Oct 25, 2014
Messages
643
Gender
Male
HSC
2016
Anthel said:
Yeah, that actually does make sense. Thanks dude! If a question does ask you to find IRR is there any way of doing it analytically or do you have to use excel/finan calc?
Click to expand...
You can do it through trial and error or the latter options you mentioned.
 
BenHowe

BenHowe

Active Member
Joined
Aug 20, 2015
Messages
354
Gender
Male
HSC
2016
Uni Grad
2020
Except for trivial or easy cases where there is only 1 cash flow with i in it or you can factorise i out via cubic or quadratic etc, no. Just use excel. You can use the IRR function or you can write it yourself like in the example attached. You use goal seek or solver to determine the rate. Also there is meant to be a minus sign to the left of the 100 :)Capture2.JPG
 
Last edited:
Orwell

Orwell

Well-Known Member
Joined
Dec 2, 2015
Messages
830
Gender
Male
HSC
2017
Will MQ library be open tomorrow? Considering Easter and everything.
 
BLIT2014

BLIT2014

The pessimistic optimist.
Moderator
Joined
Jul 11, 2012
Messages
11,591
Location
l'appel du vide
Gender
Undisclosed
HSC
2014
Uni Grad
2018
Does anyone know why E7B was evacuated today? Actual fire or just typical dodgy alarm system?
 
You must log in or register to reply here.

Users Who Are Viewing This Thread (Users: 0, Guests: 11)

Top