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# IRR

While calculating irr how to identify guess rates easily? Satya Shashank

CA Inter

13K+

12-Jun-20 18:08

49

1- Look at PV factors given in question. 2- Find out average cashflow for the given period. Divide the total investment by average cashflow. You will get an approximate present value annuity factor. Take rate corresponding to that. Suraj Lakhotia

12-Jun-20 18:09

1- Look at PV factors given in question. 2- Find out average cashflow for the given period. Divide the total investment by average cashflow. You will get an approximate present value annuity factor. Take rate corresponding to that.

Thanks sir, but what if PV factors are not given question? Satya Shashank

CA Inter

13K+

12-Jun-20 18:44

Satya Shashank

Thanks sir, but what if PV factors are not given question?

IRRs asked for problems in exams are usually in range of 8-15% for data where period is 4-5 years and sum of inflow ( without PV ) is 120-150% of outflow. Start with either 8% or 15% and you will be able to move in right direction in your next guess Sriram Somayajula

13-Jun-20 07:18

IRRs asked for problems in exams are usually in range of 8-15% for data where period is 4-5 years and sum of inflow ( without PV ) is 120-150% of outflow. Start with either 8% or 15% and you will be able to move in right direction in your next guess

Thanks sir Satya Shashank

CA Inter

13K+

13-Jun-20 08:59

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